Silver Price Forecast: Silver and the Dow

Silver Price Forecast: Silver and the Dow

 

The Dow making new highs is likely to be very good news for silver investors, because nominal silver peaks tend to come after significant nominal peaks in the Dow. These stock market rallies are driven by the expansion of the money supply, causing a big increase in value of paper assets (including stocks) relative to real assets.

When the increase in credit or the money supply has run its course, and is unable to drive paper price higher; value then flees from paper assets to safe assets such as physical gold and silver, causing massive price increases.

The two most significant nominal peaks of the Dow were in 1929 and 1973. Silver made a significant peak in 1935, about six years after the Dow’s major peak in 1929. Again, in 1980, silver made a significant peak, about seven years after the Dow’s major peak in 1973. So, if the Dow is currently forming a major peak (like I think it is), we could possibly expect a major peak in silver, towards the end of this decade to early next decade. This means we are likely to have rising silver prices for many years to come.

In 1929, when the Dow was making its peak, silver was still in a downtrend which only bottomed in 1931. However, in 1973, silver was already in an uptrend by the time the Dow peaked:

 

Dow vs Silver 70s

The top chart is the Dow from 1966 to 1974, and the bottom one is silver during the same period. Silver was already in an uptrend when the Dow peaked. The Dow made a major nominal peak near the beginning of 1973, with silver peaking about a year after that. Furthermore, silver made a major peak in 1980, about seven years after the Dow’s 1973 peak.

Notice that silver was still trapped within a cup formation (lower than the cup’s high), out of which it only broke out after the Dow peaked.

Below is a current comparison between the Dow (top chart) and silver (bottom chart):

 

Dow vs Silver current bull market

Like in 1973, silver is already in an uptrend long before the Dow’s possible major peak. The uptrend will still be intact, even if price falls further. If the Dow does peak very soon, will we have a silver top close to a year after the Dow’s peak? Also, will we have a major peak in silver coming some years after, like the 1980 peak?

Silver is again trapped within in a cup formation, lower than the cup high. This time the cup is much broader.  Again, can we expect a breakout from the cup’s high sometime soon after the Dow tops – like it did in 1973?

I believe that given the two questions above, the near future of the Dow will be telling for future silver prices.

The Dow’s relationship with the Dow/Gold ratio is highlighting something interesting regarding this current silver bull market compared to the previous two. Below is a 100-year chart of the Dow/Gold ratio:

 

dow gold ratio with Dow nominal peaks

 

In 1929, the Dow peak came at the same time as the Dow/Gold ratio peak; therefore, the nominal peak and the real peak coincided. The 1973 nominal Dow peak came 7 years after the Dow/Gold ratio peak. We are currently almost 14 years past the Dow/Gold ratio peak, and we still have not had a nominal peak in the Dow.

What is this progression in the timing of the Dow’s nominal peak relative to the Dow/Gold ratio telling us? Is this a natural progression or is it proving how increasingly bigger efforts are applied to artificially prop up the stock markets?

Whatever the reason, it has created a setup for a massive financial panic. Value is likely to run from paper assets to silver and gold like never before. While the first part of this collapse of paper assets has been relatively controlled; the last phase is far more likely to result in chaos. This means that the Dow’s collapse could be vicious.

At the same time, after having had a relatively subdued rise since the beginning of this bull market, silver could explode higher like never before, once the bottom is in. The current decline is likely to bring attractive opportunities to increase physical silver positions.

For more of this kind of analysis on silver and gold, you are welcome to subscribe to my premium service. I have also recently completed a Long-term Silver Fractal Analysis Report .

Hubert – hubertmoolman.wordpress.com

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”

Silver Price Forecast: Silver Bull Market Is Following The Structure Of The 70s Bull Market

Silver Price Forecast:

The 70s silver bull took place during a period from a major peak in the Dow/Gold ratio (1966) to a major bottom in Dow/Gold ratio (1980). The silver bull market started in 1971 and ended at the beginning of 1980.

The current silver bull market also started after a major peak in the Dow/Gold ratio (peak was at the end of 1999).The current silver bull market started in 2001, and it is also likely to end when the Dow/Gold ratio makes a major bottom. See the chart below, as illustration:

 

Dow Gold Ratio long term chart showing Silver bull market

In 2011, silver peaked at the $50 level, while in the same year, the Dow/Gold ratio made a bottom just lower than the 5.75 level. Was that the end of the silver bull market? Will the Dow go on to make highs that are multiples higher than the current high, while the silver price collapses?

The major problem with saying that the silver bull market is over, is the fact that the price has not even surpassed the high of the previous bull market. One can only begin to consider the possibility that the silver bull market is over when the price has gone a few multiples higher than the 1980 price of $50.

Until then, we look for a bottom in the silver price, and the next wave higher in this bull market. Instead, consider the Dow as a peaking bull market, with it being multiples higher than its 1973 high (the high of the previous major bull market).

Comparison of the current and 70s silver bull market

On the graphic below, the top chart is the silver bull market of the 70s, compared to the current bull market of the 70s (the bottom chart).

 

Current Silver Bull market vs 70s Silver Bull market

I have tried to line the two charts up; starting from both peaks in the Dow/Gold ratio (it is not exact, but close enough). The two bull markets are definitely following a similar pattern to some degree.

Notice that the first major peak in the 70s bull market came about eight years after the peak in the Dow/Gold ratio. The 2008 peak in the silver price was also about eight years since the peak in the Dow/Gold ratio.

During the 70s, the peak after eight years appears to have been a significant level, since price really accelerated higher, after clearing that peak. Price also accelerated higher when it cleared the 2008 peak, in 2010. The difference this time is the fact that currently we are having a retest of that peak level (which is not necessarily a bad thing).

If price does not go too far below the 2008 peak level ($21), then we have a very bullish looking pattern. The current retest of the 2008 peak level could mean that if we eventually find that bottom, and go higher, we are unlikely to ever see these levels again.

The comparison seems to suggest that the rally we had from August 2010 to April 2011, is just a prelude to the coming major rally. If the current bull market pattern continues to follow the 70s pattern, then we could have a peak in the price of silver when the Dow/Gold ratio bottoms.

We cannot be sure when this will happen, but should it be about 14 years after the peak in the Dow/Gold ratio, like it was during the previous bull market, then we could have a peak in silver at the end of 2013 to the beginning of 2014.

If the current bull market structure continues to follow the basic structure of the 70s bull market, then price should, at least, clear $140.

For more of this kind of analysis on silver and gold, you are welcome to subscribe to my premium service. I have also recently completed a Long-term Silver Fractal Analysis Report .

Hubert

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”

Gold & Silver Forecast: Possible Target For The Bottom In Gold

Gold Forecast 2013 - Silver Forecast 2013

The recent drop in gold and silver is not critical to buyers of physical metals. Instead, it is an opportunity – to buy more at lower prices; at worst, it is an irritation, since it means a longer wait. It would likely be critical only if the gold bull market is over, and prices do not rise higher than the 2011 highs for many years.

If you are buying paper gold (especially leveraged), then a drop like the current drop is likely to be critical. On top of that, the ride is almost guaranteed to remain painful, even if gold moves to $5000 over the next 2 years, due to extreme volatility.

It is important to try to identify good opportunities to buy more gold and silver (at the lowest prices), and to stay invested, for the most part of the bull market. This is what my premium service focuses on. Selling would only become an issue when the bull market is at an end (close to the top).

So, has the gold bull market come to an end?

In my previous article, I have provided an analysis of whether I think this gold bull market is over or not, using the relationship between the Dow and gold. Based on that analysis, it is unlikely that both the Dow and gold are going to make new significant all-time highs from here. We, therefore, have to decide whether it is equities that will continue a bull market from here, or gold.

Gold

Let’s look at gold patterns to see if we can find a possible level for the bottom. Below is a 7-year gold chart:

The first thing I would like to point out is the fact that a drop to the $1000 is possible. I do not believe that it is probable, however. If it goes to $1000 level, then it is unlikely that it will go there soon, as part of this drop. It would probably take a couple of years to get there, in such a case.

What is interesting; however, is the fact that if gold does a bottom similar to 1976, it would go to around $1000. That is a 60% decline of the move from the bottom of this bull market ($250) to the top at $1920.

Note that a drop below $1000 would probably mean that the gold bull market is over.

A bottom of $1300 is the call that I am going with. It is consistent with where I think the gold market is. I believe we are close to a major rally, very similar to the 1973 and 1979 gold rally. If this is the case, then there should be a very bullish pattern present on the gold chart.

The patterns that I have highlighted in red are the most bullish patterns I know. It is not a conventional pattern like those seen with traditional technical analysis. Based on the standard dimensions of this pattern, we should get an ideal bottom at $1300. If gold does not go lower than the $1300 level, over the next couple of weeks, then this pattern could be valid. If the pattern is valid, then gold will rally like it did in 1973 and 1979.

Also, I believe that the drop below $1522 is still part of the consolidating pattern since 2011, and not a break-down of that pattern. In other words, it is similar to the 2006/2007 and 2008/2009 consolidations, but with its major low right at the end, instead of at the beginning or close to the middle.

The $1300 level also represents a 50% retracement of the move from the $680 level in 2008, to the top at $1920. This is similar to the retracement we had in 1973, before the big rally.

There are some other indicators that suggest that we are close to the bottom, which I will share with my subscribers.

For more of this kind of analysis on silver and gold, you are welcome to subscribe to my premium service. I have also recently completed a Long-term Silver Fractal Analysis Report .

Hubert

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”

Gold and Silver Forecast 2013

Silver Price Forecast 2013 and beyond: Is Silver Fast On Its Way To $50?

Silver Price Forecast 2013: Is Silver Fast On Its Way To $50?

By Hubert Moolman

There is not just a similarity in how gold and silver trade at the same time period, but also how they trade at similar milestones, despite the fact that those milestones are sometimes reached at different times. This can cause silver or gold to be the leading indicator, depending on the particular milestone. The 1980 peak for both gold and silver is definitely an important milestone. For this 1980 milestone, gold is undoubtedly the leading indicator (since gold has already passed its 1980 high), so it could help us to project what silver might do around this milestone.

Market conditions often cause silver to fall behind gold, for quite some time, where after, silver normally catches-up in a big way. The fact that silver is still caught-up in a trading range lower than its 1980 high, at least four years longer than gold already, provides a classic opportunity for silver to follow that “catching-up pattern” and zoom to multiples of its 1980 high. In my opinion, silver will do just that and move much faster than gold in percentage terms, over the next months.

With gold having passed $1700 (twice the 1980 high of $850) already, given the above analysis, it stands to reason that $100 (twice the 1980 high of $50) silver could be virtually guaranteed.

Below, are two charts that show how gold and silver reacted before and after again reaching their respective 1980 highs:

Gold and silver made similar patterns before and after reaching their respective 1980 highs. From the charts, you can see there is a similarity in how gold and silver approached their 1980 high. Both made a triangle-type pattern just before they reached their respective 1980 all-time highs. When price came out of those triangle patterns, it rallied strongly to the 1980 highs, which started the formation of flag-type (pennant) patterns.

Gold passed its 1980 all-time high during 2008, while silver is yet to do so. By looking at the pattern of how gold passed its 1980 high, we can predict how silver might do it as well. If silver continues to follow the pattern that gold formed, then we can expect a massive spike towards the $50 and beyond, very soon. We are very likely in that move to $50, given that the silver price has broken out of the pennant to the up-side. My  long-term silver fractal analysis report  provides more details on what levels silver is likely to reach over the next years.

The $50 level can be compared to the water level, when you hold a beach ball under water and it starts moving upwards. When it passes the water level, it will move faster since it will now only have air as resistance, instead of water.

For more of this kind of analysis on silver and gold, you are welcome to subscribe to premium service.

Hubert

http://hubertmoolman.wordpress.com

Silver Price Forecast: The Great Silver Chart

Silver Price Forecast: The Great Silver Chart

A reader asked me to update a previous long-term silver chart of mine. Below, is the updated long- term chart for silver:

 

silver chart analysis

Since the last chart, silver has broken out of the pennant formation (on the short-term chart), and is looking really good.

On the chart, I have highlighted two fractals (or patterns), marked 1 to 3, which appear similar. What makes these two fractals so special, is the similarity of the circumstances in which they exist.

There was a significant peak in the Dow (1973 and 2007) between point 1 and 2 of both fractals. Also, point 1 on both fractals represents a significant bottom for silver after the peak of the Dow/Gold ratio.  After point 2, on both fractals, the oil price made a significant peak (1974 and 2008), about 8 years after the peak in the Dow/Gold ratio.

Thanks to this similarity in events, as well as the similarity in sequence, I was able to identify the great possibility for significantly higher silver prices, back in October of 2010. This was a very clear signal that higher silver prices were coming, and that is exactly what we got, when silver moved to $49. However, this run is not over yet. The move from $17, when silver broke out of the triangle (at point 3 of the second fractal) to $49 was just the first part of the move. In my opinion the biggest and best part of this move is still ahead. In my long-term fractal analysis report on silver, I have presented a lot of technical and fundamental evidence to support my opinion for higher silver prices over the coming years.

Based on the fractals on the chart, we could still have about two years before we could get a top like we had in 1980. That is 14 years after the Dow/Gold ratio top (beginning of 1966 to the beginning  of 1980 vs the end of 1999 to the end 2013).

It is interesting to note that the peak in silver (beginning of 1974) after the peak in the Dow/Gold ratio (beginning 1966) came about 8 years after the Dow/Gold ratio peak. On the current pattern, the 2008 peak in silver was also about 8 year after the Dow/Gold ratio peak at the end of 1999.

With the first peaks after the Dow/Gold ratio top taking the same amount of years, what are the chances that the second peaks will also correlate, giving as a top in silver at the end of 2013 to the beginning of 2014?

Also, from a price point of view, there is also an indication that this move is not over yet. If the two patterns indicated continue their similarity, it would be reasonable to expect the final top of the current pattern to at least go higher than $140 as a minimum. Why? If you measure the price movement from point 1 to point 2, in the first pattern, and compare it to the price movement from point 4 to 5, in the first pattern, you will find that the movement from point 4 to 5 is at least 7.6 times larger.

Currently the movement from 4 to the $49 in April of 2011 is only about 1.65 times larger than the movement from point 1 to 2. If it follows the first pattern, and grows at least 7.6 times larger, it will comfortably pass $140.

For more of this kind of analysis on silver and gold, you are welcome to subscribe to my free silver and gold newsletter or premium service. I have also recently completed a Long-term Silver Fractal Analysis Report .

Hubert

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”

Silver Price Forecast: Silver Offers A Great Opportunity

For more of this kind of analysis on silver and gold, you are welcome to subscribe to my free newsletter or premium service. I have also recently completed a fractal analysis report for gold and silver.

Warm regards and God bless,

Hubert

(gold and silver newsletter)

Find me also at: picturegoldandsilver – gold and silver analysis contained in one image/picture

hubert@hgmandassociates.co.za

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”

A Massive Spike In The Price of Silver Is Imminent

A Massive Spike In The Price of Silver Is Imminent

Gold and silver are very close to entering the mania phase of this bull market. In order for gold and silver to go into the mania phase, value has to be diverted from somewhere, and that “somewhere” is most likely stocks. Since 2000, there has been a correction in stock values, in real terms; however, nominally, stocks are still significantly high (close to its all-time highs).

I expect that significant value will soon be diverted from the general stock market, to silver and gold, causing prices to rally significantly, until these metals also become overvalued.

This is exactly what happened in 2007/2008. Below is a graphic (charts from barchart.com) that illustrates how this happened in 2007/2008:

The top chart is for the S&P 500 and the bottom is for silver. I have drawn a yellow line, at the point where the S&P 500 peaked. It is only after the peak in the S&P 500 that silver broke out, and eventually rallied significantly (while the S&P 500 was crashing). From a “fractal” point of view, we are currently in a similar position, with stocks getting ready to peak.

Silver Fractal Analysis

Silver has made its way out of the giant flag; however, it fell back again, lower than the upper boundary of the flag, as shown in the following chart:

Previously, I have stated that price will eventually break out of the flag and go on to make much higher highs. Below, is some evidence to support this view:

The top chart is for gold and the bottom one is for silver. Gold and silver made similar patterns before and after reaching their respective 1980 highs. From the charts, you can see there is a similarity in how gold and silver approached their 1980 high. Both made a triangle-type pattern (green lines) just before it reached the 1980 all-time high. When it came out of that triangle pattern, it rallied strongly to the 1980 high, which started the formation of a flag-type pattern (yellow lines).

Gold passed its 1980 all-time high during 2008, while silver is yet to do so. By looking at the pattern of how gold passed its 1980 high, we can predict how silver might do it as well. If silver continues to follow the pattern that gold formed, then we can expect a massive spike towards the $50 and beyond, very soon. Read my previous article for more about this comparison.

For more of this kind of analysis, see my Long-term Silver Fractal Analysis Report , or subscribe to my premium service .

Hubert

http://hubertmoolman.wordpress.com

hubert@hgmandassociates.co.za

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved.”

Silver Premium Update (Silver Price Forecast) 19 March 2012

Silver Premium Update – Silver Price Forecast

By Hubert Moolman

19 March 2012

Silver has made its way out of the giant flag; however, it fell back again, lower than the upper boundary of the flag, as shown in the following chart:

Previously, I have stated that price will eventually break out of the flag and go on to make much higher highs. This is still my expectation, and here, I would like to present some more evidence for this view.

Where is silver going now?

Based on previous work on silver, gold, gold stocks and the Dow, I see a lot of similarities between now and the late 60s to early 70s (to 1973). Below, is an interesting comparison between the silver charts of then and now … : to continue, subscribe to my premium service

 

Silver relative to the Dow

It is important to understand the conditions that exist today in financial markets. I have explained these conditions in previous writings. We are currently facing conditions that are similar to that which existed during the Great Depression, but also during the 70s. Of particular importance, is the fact that we are at a point where the stock market is significantly overvalued as compared to real assets such as gold and silver.

Since 2001, there has been a correction in stock values, in real terms; however nominally, stocks are still significantly high (close to its all-time highs). I believe that this correction will continue; however, I expect the nominal values of stocks to decrease significantly over the next couple of years, while the nominal values of assets like gold and silver increase significantly.

In order for gold and silver to go into the mania phase… to continue, subscribe to my premium service

Hubert Moolman

For more of more long-term silver and gold analysis, see my Long-term Silver Fractal Report  & Long-term Gold Fractal Report.

Silver Price Forecast: Long-term Silver Chart Analysis Indicates Why Silver Is Likely To Pass $150

Silver Forecast: Long-term Silver Chart Analysis Indicates Why Silver Is Likely To Pass $150

I would like to point out some interesting signals on the long-term chart for silver.

Below, is a long term chart for silver:

analysis long term silver chart

On the chart, I have highlighted two fractals (or patterns), marked 1 to 4, which appear similar. What makes these two fractals so special is the similarity of the circumstances in which they exist.

There was a significant peak in the Dow (1973 and 2007) between point 1 and 2 of both fractals. Both peaks in the Dow came about 7 years after the peak in the Dow/Gold ratio. After point 2, on both fractals, the oil price made a significant peak (1974 and 2008), about 8 years after the peak in the Dow/Gold ratio.

Thanks to this similarity in events, as well as the similarity in sequence, I was able to identify the great possibility for significantly higher silver prices, back in October of 2010. This was a very clear signal that higher silver prices were coming, and that is exactly what we got, when silver moved to $49. However, this run is not over yet. The move from $17, when silver broke out of the triangle (at point 3 of the second fractal) to $49 was just the first part of the move. In my opinion, the biggest and best part of this move is still ahead. In various previous articles on silver, I have presented a lot of evidence to support my opinion for higher silver prices over the coming years.

Based on the fractals on the chart, we could still have about two years before we could get a top like we had in 1980. That is 14 years after the Dow/Gold ratio top (beginning of 1966 to the beginning of1980 vs the end of 1999 to the end 2013).

From a price point of view, there is also an indication that this move is not over yet. If the two patterns indicated continue their similarity, it would be reasonable to expect the final top of the current pattern to higher than $150. Why? If you measure the price movement from point 1 to point 2, in the first pattern, and compare it to the price movement from point 4 to 5, in the first pattern, you will find that the movement from point 4 to 5 is at least 7.6 times larger.

Currently, the movement from 4 to the $49 in April of 2011 is only about 1.65 times larger than the movement from point 1 to 2. If it follows the first pattern, and grows at least 7.6 times greater, it will comfortably pass $150.

For more of this kind of analysis, see my Long-term Silver Fractal Analysis Report , or subscribe to my premium service .

Hubert

http://hubertmoolman.wordpress.com

hubert@hgmandassociates.co.za

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”

Silver Price Forecast: Silver Market Update

Silver Price Forecast: Silver Market Update

Silver is currently trading at key resistance levels. See below, a six-year silver chart (all charts generated at fxstreet.com):

On the chart, I have drawn a significant upward sloping resistance line (red line). Silver has now reached that line, trying to breach it and stay above it. It has also reached the top resistance line of a big flag pattern. If the silver price gets through these resistance lines, and stays above them, then it is likely to continue its rise, but likely in a more accelerated manner.

These resistance areas can be very tricky. Price can often react in a violent manner downwards; however, there are no certainties.

What silver will do at these resistance areas is a short-term problem. From a longer point of view, it is clear to me that silver is going much higher. Eventually, it will successfully break out of the big flag and spike upwards past the $50 level.

In a previous article, I have shown how closely silver is following a past pattern on the gold chart. That comparison also suggests that the silver price will eventually successfully breach the resistance lines indicated above. Below, is the chart from that comparison:

On the charts (silver is the top one and gold is the bottom one, I have marked the two patterns (1 to 5) that are similar on the gold and silver chart. For more details and explanation of the two patterns, please read that full article. If the silver pattern continues to follow the gold pattern, then the silver price would pass the resistance lines indicated in the first chart, and eventually challenge the $50 level.

For more of this kind of analysis, see my Long-term Silver Fractal Analysis Report ,or subscribe to my premium service .

Hubert

http://hubertmoolman.wordpress.com

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”

Silver Forecast: Silver Premium Update

Silver Forecast: Is Silver Outperforming The Gold Fractal?

Below, is an extract of my Silver Premium Update for 25 January 2012:

Since my last silver articles (here and here), the silver chart has been following the patterns, I have been tracking, quite nicely. Below is an updated version of the gold vs. silver fractal:

I have highlighted the patterns (marked 1 to 10) on gold and silver to illustrate how they are similar. It seems that silver is now just past point 12, and it has broken out at the blue downtrend line. If it follows the gold pattern exactly, it will move along in the channel formed by the two brown lines, just like gold did. If this happens, we could still wait a long time before the $50 level is challenged.

Below, is another comparison between gold and silver to put the above in perspective:

Here, I am comparing the same patterns, but I am just including a longer timeline before and after. I have marked the two patterns (of the previous chart) with points 1 to 5 (different numbering than before). I have also drawn a blue line where the top of the ascending triangle (as per previous article) was – just to give us perspective.

So, like I said before, if silver is to follow the gold pattern exactly, it would follow the red drawing, which would mean, it could take a very long time before we pass the $50 with some momentum. Based on the comparison of silver, to its 1970s pattern (as per prior article), we could follow the green drawing. This could mean we could pass $50 much sooner.

Currently, I expect it to form something more like the green drawing; however, we need to see some evidence of that over the coming weeks. This means that there should be acceleration in the silver price, as compared to the gold chart. The first thing that needs to happen (I think) is that price needs to break out (and stay out) of the channel (formed by the two brown lines) in the first chart.

This kind of thing did happen before, as you will see from an extract of my October 2010 Premium Update, below:

As per that update, if silver was going to follow gold exactly, it would have taken a long time before it broke out of that upward trending blue line. However, there was acceleration in the silver price, as compared with gold, and it ended up breaching the upward trending blue line, much faster than the gold pattern suggested.

For more of this kind of analysis, see my Long-term Silver Fractal Analysis Report ,or subscribe to my premium service .

Hubert

http://hubertmoolman.wordpress.com

hubert@hgmandassociates.co.za

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”

Silver Forecast Video: The Shift To Measuring Wealth In Ounces Instead Of Dollars

Video (Silver Forecast): The Shift To Measuring Wealth In Ounces Instead Of Dollars

 

For more of this kind of analysis on silver and gold, you are welcome to subscribe to my free silver and gold newsletter or premium service. I have also recently completed a fractal analysis report for gold and silver .

Warm regards and God bless,

Hubert

Silver Price Forecast 2012:I Stand By $140 Silver Price In 2012

Silver Price Forecast 2012:

There is a well-established relationship between how silver and gold trade. They often trade similar in the same time period, but also at similar milestones, although those milestones are sometimes reached at different times. This can cause silver or gold to be the leading indicator, depending on the particular milestone.

I have previously used this relationship to predict how silver will trade. Below, is an extract of that update:

Currently, there is another situation in the silver and gold market that provides an opportunity to predict how silver prices might trade over the coming months. I have pointed this out before, in a previous article. Here, I would just like to provide an update, and add a few more thoughts.

This situation or opportunity revolves around the 1980 all-time high for both metals. Gold passed its 1980 all-time high during 2008, while silver is yet to do so. By looking at the pattern of how gold passed its 1980 high, we can predict how silver might do it as well.

Below, is a comparison of silver and gold around their respective 1980 highs:

From the chart, you can see there is similarity in how gold and silver approached their 1980 high. Gold and silver made a triangle-type pattern (marked 1 -3) just before it reached the 1980 all-time high. When it came out of that triangle pattern, it rallied strongly to the 1980 high, which started the formation of a flag-type pattern (marked 3 – 9).

It appears that silver is now past point 9 (29 December 2011), and will now be eyeing that $50 level.

Market conditions often cause silver to fall behind gold, for quite some time, where after, silver normally catches-up in a big way. The fact that silver is still caught-up in a trading range lower than its 1980 high, at least four years longer than gold already, provides a classic opportunity for silver to follow that “catching-up pattern” and zoom to multiples of its 1980 high.

With gold having passed $1700 (twice the 1980 high of $850) already, given the above analysis, it stands to reason that $100 (twice the 1980 high of $50) silver is virtually guaranteed.

There are many indicators suggesting that we are close to a point where silver might catch –up with gold, relative to its 1980 high, in a big way. My recent analysis of the gold/silver ratio also seems to suggest this. So, as things stand, I expect silver to outperform gold for most of this year, and I stand by my target of at least $140 silver by the end of 2012.

For more unique analysis on silver and gold, you are welcome to subscribe to my free newsletter or premium service. I have also recently completed a fractal analysis report for gold and silver.

Warm regards and God bless,

Hubert

http://hubertmoolman.wordpress.com/

hubert@hgmandassociates.co.za

Silver Price Analysis: Silver’s 2011 Big Move – Was It The End Or The Beginning?

Silver Price Analysis: Silver Likely To Make Explosive Move

The price of a good often behaves in a similar manner at or around the same kind of milestone. An example of such a milestone could be a significant top. Price often forms a similar type of pattern at different significant tops – different in terms of time of occurrence. This is a reflection of how market participants themselves often behave in a similar manner when faced with the same kind of situation. This of course makes perfect sense, since it is normal, for example, to rest after you have been extremely busy for a while. For most people, this is true whether it was yesterday, or in 20 years.

In the current silver market, there are some similarities as compared with the 1970s. There are also things that are much different today, in the economic landscape, compared with that of the 1970s. One of the significant things that is different now is the fact that debt levels, relative to GDP, are extremely high compared with the seventies.

In my opinion, this is one of the main reasons why we are likely to have a massive Depression this time around.

Here, I would like to illustrate how the silver price behaves in a similar manner, today, compared with the 1970s. Below is a graphic that compares the silver price chart of January 1978—August 1979 to the period from January 2009—present (charts generated at barchart.com):

I chose these timeframes because price broke out of the significant high (for the relevant decade) around these periods. I have drawn a blue line at the level of the relevant significant high.

Note how the run-up to the blue line is visually similar in both cases. After going through the blue line, price rallied significantly until it peaked at point b (in both cases). It then corrected/consolidated forming a flag/pennant type formation.

Note that in the 70s and in the current chart, price corrected to just above the blue line. It does not mean it cannot still move to the blue line, since, to stay valid, it just needs to stay at or above the blue line. Note that, currently, I do not see any evidence that we will still go lower than the $26 level.

The comparison suggests that we should now rally towards point d and eventually go higher than point b ($50).

The flag pattern formed currently is significantly bigger (in price movement) relative to that of the 1970s. This is possibly indicating that this fractal pattern is growing significantly, which could mean, going forward, bigger price increases relative to the price increases of the 1970s.

The move from point a to point b, on the bottom chart, was remarkable. It took silver from about $17.50 to about $50, a 185% increase. Compare that to the 1970s move of 33.33% (from about $6 to $8). To me, this signals that silver has changed gears (big-time) relative to the 1970s.

The above comparison is also supported by a comparison I did for gold and silver, in a previous article.

Find me also at: picturegoldandsilver – gold and silver analysis contained in one image/picture

Below is a graphic that compares the silver chart (from 2007 to today), to the gold chart (from 2008 to 2010) (all charts generated at fxstreet.com):

The top chart is for gold and the bottom is for silver. I have highlighted how similar patterns exist on both charts. On both charts are ascending triangles, out of which price broke out to the upside. After the breakout, price increased significantly from where both formed a consolidation pattern.

The ascending triangle for silver (roughly 30 months) is much bigger than that of gold (roughly 19 months). The consolidation patterns for both charts took roughly the same amount of time to form, relative to their ascending triangles (about half the time of the triangles).

Based on this comparison, it would seem that silver was at point 0 on 29 December 2011, and it is now busy making its way toward the blue line and will eventually pass the $50 level, just like the comparison to the 70s chart suggest.

Also, if you compare the price movement for silver after it broke out of the triangle to that of gold’s movement, you will notice that there is a huge difference. Gold moved from about $1000 to $1227 (a 22.7% increase), whereas silver moved from about $21 to about $50 (a 138% increase). This, to me, says that there is a massive amount of energy underlying the silver market, and when it is ready to unleash, we will see price/value increases that will stun even the most ardent silverbugs.

The kind of movement we’ve seen since silver has moved out of the triangle is normally associated with moves at the end of a big move. So, either that move was the end of silver’s big move, or it was just an unusually big beginning of a really big move, which suggests we will have an unusually big end of a big move (still to come). Again, I see no evidence to suggest that anything we’ve seen so far was the end of the silver bull market, so I am expecting the latter (i.e. a very powerful upleg yet to unfold).

The real power of this expected move is likely to be released only some time after price has surpassed the $50 level.

Below, is a video that illustrates the principle discussed here:

For more of this kind of analysis on silver and gold, you are welcome to subscribe to my free newsletter or premium service. I have also recently completed a fractal analysis report for gold and silver – more detail on my website.

Warm regards and God bless,

Hubert

Find me also at: picturegoldandsilver – gold and silver analysis contained in one image/picture

hubert@hgmandassociates.co.za

Silver Analysis: Why Silver For A Monetary Collapse? Part 2

Silver Analysis: Silver Forecast

In part 1, I stated:

“We are at the edge of a major economic crisis. Our monetary system is the underlying cause of this major crisis. The massive debt bubble created by our monetary system is about to burst. The demonetization of gold and silver, has over the years diverted value from these metals, to all paper assets (such as bonds) linked to the debt-based monetary system.

The process of the devaluation of gold and silver, started by the demonetization of gold and silver, is about to reverse at a greater speed than ever before. This is similar to what happened during the late 70s, when the gold and silver price increased significantly. However, what happened in the 70’s was just a prelude to this coming rally. The 70’s was the end of a cycle, this is likely the end of a major cycle; an end of an era of the debt-based monetary system (dishonest money).”

What this debt-based monetary system has done, is to create what I call a “mirror-effect”, whereby, silver (and gold) is pushed down in value, to a similar extent as to which paper assets such as general stocks are pushed up in value. This mirror-effect clearly shows up on the long-term charts of gold, silver and the Dow.

Here (in part 2), I would like to show how this “mirror effect” of silver versus the assets linked to the debt-based monetary system (general stocks in this case), shows up on the long-term charts. This “mirror effect”, also reveals an interesting cycle, which provides more evidence to support my view, of the impending judgment of this system (monetary system), in terms of standards according to the Holy Scripture.

recommended: similarities between current crisis and great depression

Below, is a long–term silver chart (real and nominal) from 1850 to present (generated at minefund.com):

MineFund’s real precious metals prices are deflated by U.S. consumer price inflation (Consumer Price Index-All Urban Consumers, not seasonally adjusted, January 2011 = 100).

I have drawn a vertical red line, approximately where silver was demonetized (1870s). Notice how the real price of silver collapsed after the red line, from about $30, until it bottomed in 1931 at $4.29. It then traded side-ways (from the big-picture view) for many years, until it spiked from about the early 1970s, making a peak in 1980, where after, it bottomed again in 2001.

Technically, the bottom in 2001 was the completion of what would be a remarkable double bottom reversal, with the first bottom being in 1931. After a double bottom formation, there is often a big rally, and that is exactly what happened next. If this pattern continues to follow the pattern of a valid double bottom, it will reach levels that will exceed the 1980 high by at least one multiple, but probably by many more.

However, the purpose of this article is not to deal with targets. The interesting thing about this possible double bottom is the fact that the two bottoms came 70 years apart. This 70 years period also appears on the long-term Dow chart. Below is a Dow chart (from stockcharts.com) from 1900 to present:

On the chart, I have indicated a 70 year period from when the Dow peaked in 1929, to the peak in 1999. The reason for using the 1999 peak instead of the 2007 peak, is the fact that the 1999 peak represents the real peak, since the Dow/Gold peaked in 1999 (like it did in 1929).

Notice the dates of the peaks and how they fit in with that of the bottoms of the real silver price, as well as the similar 70 year periods between. In my opinion, the occurrence of the 70 year period on both charts, in the context as explained above, provides additional evidence of the link between silver’s demonetization (or suppression) and the massive debt bubble of this century – as explained in part 1 of this article.

While the Dow is inflated to the peak in 1929, silver is suppressed to its low in 1931. And again, the Dow is inflated to its peak in 1999, while silver is suppressed to its bottom in 2001.

So, the peaks and troughs, as presented in the above charts, are the manifestation (in visual form) of the debt-based monetary system causing paper and related assets to rise, while suppressing silver. Another way of looking at it is that the debt-based monetary system is fuelling speculation in paper assets by using energy diverted from precious metals. THIS IS THE REAL MANIPULATION OF GOLD AND SILVER – it is in the open.

Silver (like gold) stands in direct opposition to the current monetary system (they are inescapably linked). The fall (and falling) of this system is the rise of silver as money; therefore, massive increases in what silver can buy in real terms. 

Update on the silver pattern presented in my previous article

In my previous article on silver, I presented the following graphic that compares the silver chart from 2007 to today, to the gold chart from 2008 to 2010 (all charts generated at fxstreet.com):

It seems that silver has now made that low at point 12 (note, there is still a possibility of a retest). Price is now looking to break out of the down-trend since September (point 7). If silver continues to follow gold’s pattern above, we could see new all-time highs over the coming months.

For more of this kind of analysis on silver and gold, you are welcome to subscribe to my free silver and gold newsletter or premium service. I have also recently completed a fractal analysis report for gold and silver – more detail on my website.

Warm regards and God bless,

Hubert

http://hubertmoolman.wordpress.com/

hubert@hgmandassociates.co.za

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”

Silver Price Forecast: Where Is The Silver Price Going?

Silver Market Price Forecast

Silver and gold are in the process of bottoming, and should rally very soon. The depth of the recent decline may be surprising; however, it does not signal the end of the bull market. The fundamentals for silver and gold are very strong, and they have not changed over the last couple of days

We are still using fiat money and debt levels are still extremely high. The massive debts brought about by the debt-based monetary system, will not just go away. A few things have to happen before debt is brought to acceptable levels.

The debts have to be paid or defaulted on. Either way, that means significantly reduced economic activity (Depression) world-wide. That likely also means another big stock market crash. Before this happens it would be foolish to talk about a top in precious metals, since these conditions (a deflating debt bubble) are what will drive gold and silver prices significantly higher.

In a few of my previous articles, I have shown how one can use gold as a leading indicator, to predict what may happen to the silver price. I stated the following:

“So, there is not just a similarity in how gold and silver trade at the same time period, but also how they trade at similar milestones, despite the fact that those milestones are sometimes reached at different times. This can cause silver or gold to be the leading indicator, depending on the particular milestone”.

I would like to continue with that theme, and use gold’s past patterns to suggest how the silver price will perform over the next couple of months.

Below is a graphic that compares the silver chart (from 2007 to today), to the gold chart (from 2008 to 2010) (all charts generated at fxstreet.com):

The top chart is for silver and the bottom is for gold. I have highlighted how similar patterns exist on both charts. On both charts are ascending triangles, marked 1 to 3, out of which the price broke out to the upside. After the break-out, price increased significantly, from where both formed a consolidation pattern.

Find me also at: picturegoldandsilver – gold and silver analysis contained in one image/picture

The ascending triangle for silver (roughly 30 months) is much bigger than that of gold (roughly 19 months). The consolidation patterns for both charts took roughly the same amount of time to form, relative to their ascending tri-angles (about half of the time of the tri-angles).

So, from these two charts, it seems that silver is still following gold’s lead – but, are those consolidating patterns similar? It might not be clear that they are similar, but let’s take a closer look.

Below, I compare the two consolidating patterns, to see if there are any similarities:

Again, the top chart is for silver and the bottom for gold. I have highlighted significant points (1 to 12) on both charts to suggest how the patterns may be similar. The first significant similarity to point out, is the fact that the first part of both patterns formed a cup (points 1 to 5), which are similar to cups formed, right at the beginning of both their respective triangles. (See the previous chart – the cups start at point 1 and finishes halfway to point 2).

The fact that the first parts of both patterns are similar to cups within their respective triangles, lends more justification for comparing these patterns. One of the reasons why it might not be so apparent that these two patterns are similar, is the fact that the angle at which the patterns appear, are different overall, as well as for some individual patterns, within the pattern. For example, for gold the cup (1 to 5) slants upward, from left to right, whereas for silver it slants downwards.

Now, if you look at both chart in detail, and compare the points I have highlighted, you will see that they are quite similar. If these two patterns are indeed similar, then silver is searching for that point 12, which could already be in today, or could be in (lower) over the next couple of days.

If the similarity between the two patterns continues, then we could have a massive rally soon. This is therefore consistent with my previous analysis which calls for a much higher silver price over the next couple of months.

For more of this kind of analysis on silver and gold, you are welcome to subscribe to my free newsletter or premium service. I have also recently completed a fractal analysis report for gold and silver.

Warm regards and God bless,

Hubert

(gold and silver newsletter)

Find me also at: picturegoldandsilver – gold and silver analysis contained in one image/picture

hubert@hgmandassociates.co.za

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”

Silver And Gold Market Price Forecast: Buying Silver Is Like Buying Gold At $554 Today

Silver and Gold Market Price Forecast

I think that buying silver today is like buying gold for $554 an ounce. Let me explain: As I am writing, silver is currently trading at about 65.2% (32.6/50) of its 1980 high. If gold was trading at 65.2% of its 1980 high, it would be trading at $554 (0.652*850).

Now, I really like gold, even at today’s price of $1 738, but why should I pay $1 738, if I can get it for $554 by buying silver and then exchanging it for gold when the gold/silver ratio is at an extreme (in favour of silver). The reason for this logic comes from the fundamental relationship between gold and silver as explained in my previous article.

For my argument to be valid, silver has to outperform gold over my investment period, and at least equal gold’s performance relative to its 1980 high. That is, for example, if gold reaches five multiples of its 1980 high ($4250), then silver should do the same ($250), in this example, giving us a gold/silver ratio of 17.

Now, if silver outperforms gold, then that means that the gold/silver ratio should decline over my investment term. In my previous article called: Why Silver for a Monetary Collapse, I analysed the gold/silver ratio from a very long perspective (200 years). Here I would like to take a slightly more short-term view (40 years).

Below, is a long +/- 40 year chart of the gold/silver ratio:

On the chart, I have identified two fractals, which I have both marked with points 1 to 3. The two patterns are visually very similar. I have indicated two option of where we could be currently (on the current pattern), compared to the 70s pattern. The ratio appears to be at a major crossroads, ready to make a big move, up or down. This could mean that a massive move in the gold and silver price is due shortly.

Based on the patterns, if it moves up, it would likely signal the end of the precious metals bull market, similar to January 1980. A move down would be an acceleration of the current bull market in gold and silver, similar to August/September 1979.

The question is therefore: Do you think the bull market in precious metals is over? Before you answer that, first consider the following:

On the above graphic, the top chart is the current gold bull market from 1999 to date, compared to the bull market of the 60s and 70s, the bottom chart. The previous bull market in gold was about 14 years long, from a peak in the Dow/gold ratio to the bottom in Dow/gold ratio. The current bull market is 12 years, from the peak in the Dow/gold ratio to date.

The previous bull market ended with a parabolic move in gold (on the above scale). The current bull market has not made a parabolic move (on the above scale); in fact, it has been rising steadily over the last 12 years.

To me, these two charts suggest that we are more likely to have a parabolic rise in the gold price, than being at the end of this bull market. Therefore, it also suggests that price action for gold and silver, and the gold/silver ratio is likely to be more like 1978/1979 than like January 1980.

So, back to my argument of buying silver, in order to get gold at $554: I certainly think that silver will outperform gold over the remaining part of this bull market in precious metals, as well as, at least equal gold’s performance relative to its 1980 high. I can certainly see how gold could be at $4250 with silver being at $250, or at higher prices, with the gold/silver ratio being at 17 or less.

For more analysis on silver and gold, you are welcome to subscribe to my free or premium service.

Warm regards and God bless,

Hubert

http://hubertmoolman.wordpress.com/

hubert@hgmandassociates.co.za

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”

Silver Price Forecast Video : Silver Is The ideal Asset For A Monetary Collapse part 2

Silver Price Forecast: Silver During A Monetary Collapse

Please subscribe to my premium or free service (subscribe on the side bar by entering email address) for regular updates. For more detailed silver analysis you can purchase my Silver Fractal Analysis Report.

Warm regards and God bless,

Hubert

Silver Price Forecast Video : Silver Is The ideal Asset For A Monetary Collapse

Silver Price Forecast: Silver During A Monetary Collapse

Please subscribe to my premium or free service (subscribe on the side bar by entering email address) for regular updates. For more detailed silver analysis you can purchase my Silver Fractal Analysis Report.

Warm regards and God bless,

Hubert

http://hubertmoolman.wordpress.com/

hubert@hgmandassociates.co.za

Silver Price Forecast 2012 And Beyond: Silver Bull Market vs Dow Bull Market

Silver Price Forecast Video:  Comparing the Dow’s bull market of the 80s and 90s to the current silver bull market. Similarities predict that silver prices should rise significantly over the coming years:

 

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