HardAssetsInvestor

Written by Larry Baer  |

June 28, 2012

Larry Baer's Technicals: Strengthening US Dollar May Push Gold To $1250, WTI Below $70

Details

Bearish technical indicators and global slowdown fueling downtrends for gold, silver and oil.

Disclaimer: Futures, options and forex trading is speculative in nature and involves substantial risk of loss. All known news and events have already been factored into the price of the underlying commodities discussed.

In my last column, I described how gold and silver were in longer-term downtrends but not on the longer-term charts. Since then, the decline in gold and silver has slowed, but they may have revealed which way they are headed in the near and long term.

Silver & Gold

Since February silver prices have steadily declined until mid-May, when the white metal seemed to have found a foothold. Was this a bottom in the precious metals many traders have been waiting for?

I had yet to receive longer-term downtrend confirmation on silver’s longer-term charts. Silver then had a nice retracement from mid-May to early June, regaining support and even generating a buy signal June 12 on the daily chart.

But it appears as if this may have been a case of consolidation since silver failed to confirm a longer-term uptrend on the daily chart, and then negated its buy signal by giving a King’s Cross counter-trend sell signal. A King’s Cross involves the cross of the moving averages followed by a cross back that can be viewed as a technical indicator for re-evaluating the next longer-term price trend. Now silver’s trend on the daily chart has again changed to the downside and took out the recent low registered on May 16, both bearish indicators.

Silver Daily Chart

Taking a look at the weekly chart, silver gave a sell signal last week and the close below 26.895 confirms silver may be in a longer-term downtrend. On the monthly chart the trend is down for silver, but it will be three more months before it can qualify for a long-term trend confirmation.

Silver Weekly Chart