"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat

Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput

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Tuesday, October 25, 2011

Gold Breaks out

Gold bulls finally managed to beat back the line of defense erected by the perma shorts at the Comex in today's session as safe haven buying came into gold from all quarters early in the session and continued to build as it wore on. The technical breakout above resistance also brought in both short covering and new momentum based buying.

Volume on the upside move has been very good which is generally regarded as confirmation to the validity of the breakout.

The next technical target lies near the $1720 level.

Downside support now moves up towards $1680 with much better support near $1650.

Helping confirm the move is the surge in both the mining shares as evidenced by the HUI and the upside breakout above $32.50 in Silver.

Note on the silver chart that the market is  currently up against the 50% retracement level of the most recent leg down. Clearing this should allow it push first towards $34 and then up against the $35.15 - $35.25 level.

Downside support levels are first near $31 and then back down towards $30.

1 comment:

  1. Hey, Dan -
    Thanks for the commentary. Appreciated as always.
    Just like to point out that silver is right up against the underside of the trendline that joins the Jan 1998 and Feb 2008 highs where it is trading tonight in the 33.20 area.


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