And certainly, the strong-ish bounce off the blue trend line below was a good (and in fact, necessary) development if things are to turn around for the gold and silver bulls. But if we look at the charts -- and as per my New Year's resolution, ignore all fundamentals-related news (or pseudo-fundamentals -related hype) about China's insatiable purchases or JPM lawsuits -- I cannot justify being long here, especially aggressively. The 30-week MA (or its rough equivalent, the 144-day MA) is still at $1300. And note that the red dotted line below hasn't even been cleared on a weekly close. No market goes straight down, so this seems to me just another brief rally before the continuing grind down.
And then there's the Canadian dollar chart from last week... It's broken the blue trend line on a weekly close! Not a good sign.The all-important "yields-in-silver" chart could be rolling over, or could simply be returning to its trend line on its way to the green dotted wedge, which has marked the bottom in gold without fail.
However, silver's strong performance does make me think twice about calling bs on this latest gold rally.
In fact, the chart I've been using with lots of success this year to decide when to go long silver has given a buy signal. Namely, a reversal on the weekly three-line-break chart measuring the GLD:GDXJ ratio.
However, even here, I'd like to see a confirmation on the similar chart that has dependably signaled the legitimate bull-bear cycles in gold. It missed having a reversal by a hair, so it will be interesting to see how this week plays out.