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: 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):

silver long-term chart

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:

silver vs gold

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 Price Forecast: Analysis of the Long-term Silver Chart

Analysis Of The Long-Term Silver Chart Suggests Significantly Higher Prices

In a previous article, I wrote about the shift to measuring wealth in ounces instead of Dollars. In that same article, I expressed my opinion that I consider silver bullion to be one of the best current opportunities to increase one’s gold ounces.

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

Below, is a long term chart for silver:

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. 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).

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”

VIDEO:

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 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 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:

 

For more silver analysis, purchase my Silver Fractal Analysis Report or subscribe to my Premium Service.

Silver Price Forecast: Why Silver For A Monetary Collapse? Part 1

Silver Price Forecast:

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).

This era of dishonest money, has filled the economic world with many promises that will never be fulfilled. There will be a massive flight out of paper promises, into the ideal safe haven assets that would offer protection.

The type of assets that people will flee to depends on the extent to which the assets offer protection against the specific crisis. For example, if people are extremely thirsty, then most would likely go for water, instead of milk or soft drinks. They would therefore rank water higher than soft drinks or milk. The reason that they would go for water is due to its superior properties, for countering the thirst crisis.

In a similar manner, people will run to the assets that have the ideal properties to counter risks and issues brought about by this economic crisis. Most people in the  hard-money camp will agree that gold is the asset that people will flee to in this economic crisis, but for some reason, there  are those (sometimes respected analysts) that believe that silver is not that safe-haven asset.

I believe that people will (and are) running to gold, not because gold was ordained by some divine providence or something, but: because it has those specific properties to offer protection against the crisis – properties given by God. It follows naturally that whatever assets have similar properties, will be similarly in big demand, as a safe- haven.

What are the properties of gold that offers so much protection against this crisis?

Simplified, it is important to understand that the true nature of this crisis is monetary; therefore, assets that possess monetary properties will be the premier assets. The issue here is not whether gold, silver or other assets are money or not. It is whether they have monetary properties, because that is what people will be after.

Good money should be effective as a store of value, a medium of exchange as well as a unit of account. In order for money to be effective in the above it has to have the following properties:

  • divisible – should be divisible in smaller units
  • portable – able to carry it around therefore a high value should be able to be contained in a small space and weight
  • homogenous – one unit should be the same as any another unit
  • durable – should not be able to be easily destroyed or eroded
  • valuable – should have intrinsic value, normally because it is desirable. Should not be able to be created or discovered without reasonable effort.  normally a commodity itself.

recommended: similarities between current crisis and great depression

Gold has all the above properties. It is almost a perfect fit. How about silver? Is it not also a perfect fit?  In fact, silver is a perfect fit as much as gold is; there is not much to choose between the two. Gold and silver are the two assets that best fit the above properties; therefore, both will be the assets in most demand. If someone tries to convince otherwise (that silver will not offer protection like gold), he has to show how silver does not fit the properties that will offer protection against this crisis (the above listed properties).

Personally, I prefer silver over gold. Mainly because: silver offers better value as a result of it being one of the most undervalued assets today, it is less likely to be confiscated (at least for a while), it is more accessible for now due to its lower price. However, I recommend both.

Chart Analysis

Below, I have put together two great long-term charts. The top one, is from minefund.com, and features the gold-silver ratio from 1791 to present. The bottom chart, is from sharelynx.com, and features the Dow-gold ratio from 1800 to present.

I have lined-up the two charts. I will only point out a few things here. The first thing is the double-top in the gold-silver ratio, and the recent failed attempt (at the 80 level) to test the highs. This makes a test of the all-time highs very unlikely and a test of 16 (the bottom between the two tops) very likely.

I have drawn a vertical blue line, approximately where silver was demonetized (1870s). Notice how the gold-silver ratio started rising, becoming very volatile with three massive peaks eventually forming.  The Dow/gold ratio also made three massive peaks after the blue line.

recommended: why a mega gold stocks rally is imminent

The Dow/gold ratio (when high) is in some way, a proxy for the extent to which value is diverted from real money to paper assets. The 80 years before the blue line, silver and gold was generally still money. The gold-silver ratio was reasonably stable and lower than 20, and the Dow-gold ratio was at lower levels.

After the blue line, the gold–silver ratio rises significantly, and becomes very volatile. The Dow-gold ratio also rises significantly, showing the extent to which value is being diverted from real money (silver) to paper assets. After, gold is demonetized (by the 30s), the Dow/gold ratio rises even more, making higher peaks, and showing the extent to which value is being diverted from both gold and silver, to paper assets.

This trend has been reversing since about 1999, and it is likely that the speed of the reversal will soon intensify. Notice how the Dow-gold ratio tested the 1 level in 1980. That level is incidentally the key- level at which it broke out of during the 1870s, which is exactly when silver was demonetized. At the same time, in 1980, the gold-silver ratio also made a significant low of about 16. Both ratios were attempting to go back to pre-1870s levels. Was it a co-incidence that both ratios tested the 1870 levels?

After the double-top, it is almost certain that the gold-silver ratio will go back to the 16 level, and even look to touch an extreme level, lower at possibly 7. Technically, based on the extreme highs of the two peaks of the double-top, a ratio of 1:1 is not impossible.

Based on the true fundamentals, it is reasonable to expect things to settle at pre-1870’s levels – eventually. That is, that gold and silver will be used as money, with the gold-silver ratio at between a possible 10 and 16.

For more detailed silver analysis and silver price forecast, I have prepared a Silver Fractal Analysis Report. For more details, see  here.

Subscribe to this blog or to my Youtube channel: FractalSigns for regular gold and silver commentary and updates.

You might also like the following:

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Warm regards and God bless,

Hubert

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