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<p>[QUOTE=&quot;NorthKorea, post: 1731675, member: 29643&quot;]Medora essentially hit the nail on the head. Support and resistance are psychologically derived numbers/estimates based upon assumptions about consumers.</p><p><br /></p><p>Assumptions that create price supports:</p><p><br /></p><p>-If I bought at a low price, and the price goes lower, all things constant, I will (if able) buy more.</p><p>-If the current price is lower than the price I bought at, I&#039;ll be unlikely to sell unless I absolutely need the money.</p><p><br /></p><p>Assumptions that create price resistance:</p><p><br /></p><p>-If I bought at a high price, and the price has been low for a while, I might try to &quot;get out when I can&quot; and &quot;sell into the rally.&quot;</p><p><br /></p><p>These assumptions are &quot;super-charged&quot; by computers which are programmed specifically to buy/sell as close to support/resistance as possible. Then, when/if support/resistance is pierced, they are programmed to do the opposite of what would have happened within the range.</p><p><br /></p><p>Essentially, support/resistance are trend based assumptions for a price range. History/psychology tells us that commodity goods trade in well-defined ranges. Until those ranges are broken, the assumption is that you sell near the top of the range and buy near the bottom.</p><p><br /></p><p>As always, precious metals (and most non-perishable commodities) are hedges against inflation and nothing more. The US dollar is going through a rally of strength that hasn&#039;t been seen since post-WW2. Nearly all major currencies are seeking refuge in USD. Even if QE continues in the US, the reality is that our version of it isn&#039;t as bad as other countries.[/QUOTE]</p><p><br /></p>

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