Have we peaked out for awhile?

I follow the technicals of gold and silver constantly. They are just like stocks, with 100 and 200 day moving averages. Also lines of support and resistance. From the looks of the last week all of the technicals were tossed out the window and we entered uncharted water. I don't belive that's necessarily bad, but we need to wait until the technicals are reestablished and the price starts back up. Remember that you will never buy at the bottom or sell at the top. There are several things in favor of a price increase. The more unstable the world the more investors scramble to the security of gold and silver. We have the oil crisis, the housing crisis, the upcoming election, and the dropping dollar to name a few. All leading to a promising outlook for precious metals. However, as far as I'm concerned, it's time to sit on your hands and let it come back say 10% or more before jumping in. I included the technical charts from Monex.com for silver.
Vegas Vic
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Demand for gold in the jewelry sector is going to be off by 30 to 40 % this year. I run a jewelry/coin shop and we don't have to buy anything for Christmas because so many people have been selling gold we are over stocked at this point. Every jeweler that I know is in the same position.

 

Thanks 4 the tip. What do you think that will do for PM prices in the fall?

 

But silver back down to 12+? what's with that? I purchased some silver about 6 months ago for $21. Sure they were slabbed and MS69's but dang . . . I never in my wildest dreams expected this. :headbang:

 

Gold will rebound, time too buy!

If you can buy , then do so now...gold WILL rebound within a few weeks, silver will not see any large increase, should hold steady @ $20
As for election, difficult to say how will affect prices prescious metals?
Ozarktravler

 

Stocks and gold act amazingly the same. Both showing lines of resistance and support, both tending to follow their 100 and 200 day moving average and the patterns that both leave on daily closings prices are amazingly similar. Unless you have sold gold or silver, you only have paper losses at this point. I tend to believe this is a good point to cost average your holdings. i.e. If you bought ten ounces at $900 and then buy 10 ounces at $800 your average cost is $850, down from the original $900. Meaning anything sold over $850 will give you a profit.
I beleive we have a market based on fear. With all the uncertainty in the world it is natural. Russia invades Georgia, the Iraq war, gas prices, US inflation, the dropping US dollar, a Presidential election between two weak candidates and the apparent coming recession. Are all factors of uncertainty, but all are factors that should lead to higher gold prices.
As Warren Buffet has stated time and again he buys on fear. If a stock, the market as a whole,commodities, etc. are being sold cheap on the fear of the future, he will step in and profit on that fear.
I give less creedence to the idea that India and China need it for electronics. Yes, they will need it, but they won't buy it day to day or buy it outright. They will purchase futures contracts and either sell the contracts or take delivery for their manufacturing.
What I believe is happening is that short sellers of gold, had to unload their contracts or risk having to purchase the gold. I also believe there are a large percentage in the futures markets, going naked and leading the fear.
I think the best advice is to stay the course, if you can leave it as a paper loss do so. If you can afford to purchase more, do so.
When I first got into Finance, I was told in grad school, you will never buy at the bottom or sell at the top. Truer words were never spoken. I also beleive in never being afraid to take a profit. After all, a small profit is better than breaking even or taking a loss.
Sorry I took up so much room, but with gold at $800 an oz, down approximately 20% from its high, I wanted to share my philosophy and one that has served me well in stocks, bonds and commodities.
Vegas Vic

 

VegasVic says: "If you bought ten ounces at $900 and then buy 10 ounces at $800 your average cost is $850, down from the original $900. Meaning anything sold over $850 will give you a profit."

Seems it would be more profitable if you just bought at the $800 rate and sold for $850. But then again . . . I'm not all that good at math!

 

Vegas Vic sounds wise to me...

I think that Vegas Vic's experience supports the way I have seen things as well. If one were to have enough money to buy gold coins, there are some coins that are safer to bet on than others... earlier ones and lower circulation coins with the highest affordable grades. Early silver also seems untainted by metal prices. So, it may be a bit of a buyers' market IF one has any money to spend, that is! You want to have enough left to fill your tank and get to work and pay your heating bills... when the oil prices go up.

 

I think he meant that if you had ALREADY bought gold at $900, then if you were to buy some at $800, you could cost average that to improve your position.

Not that you should intentionally buy at two different prices and then average.

 

Yes, Gocamels has it exactly right. If you had previously bought in at $900 and then hung on to the gold, an equivalent amount purchased at $800 would lead to an average cost of $850. This allows you to turn a profit at a lower price and perhaps buy more at $800, lowering your average cost even further. However, it is crucial that you have the financial werewithall to withstand the market and let it climb back up. If you're going to need the money in a month don't try it.
Vegas Vic