Gold & Silver

Gold added $4.83 to close at $655.13. Gold is still below its lower trend line, which obviously needs to be regained.

RSI turning up slightly, histograms are slowly receding, and stochastics appear to be preparing to turn back up.

The chart remains biased to the bearish side, but did make good progress for the week. If it puts in a similar performance this week the chart will turn positive.

Next up is the daily chart for silver.

As did gold, silver performed better for the week. The chart still remains tilted to the bearish camp. Once again, if it puts in a similar performance this week the chart will turn positive. Time will tell.

Hui Index

The Hui gained 10.13 to close out the week at 336.27. The index is above its lower trend line and its 50 dma. RSI shows positive divergence.

STO shows a positive divergence, but the negative MACD cross over still remains in effect.

The above weekly chart of the Hui shows great potential. A series of higher lows remains intact. Positive divergences abound. Only the MACD is negative.

Also note that it is a right angle triangular formation with the upper trend line or side of the triangle a straight horizontal line.

Such formations are considered to be bullish continuation patterns of the prior to trend, although they can be reversal patterns of the most recent trend.

They are also referred to as an ascending triangle that shows accumulation is present.

Hui/Gold Ratio

The Hui/gold ratio still needs to break above upper resistance to signal a meaningful rally is underway. It is very close to so doing.

Summary

The dominant big picture marker is the huge supply of paper fiat debt-money sloshing around the world, leaving asset bubbles in its wake, the most egregious being the stock markets of the world because they are extremely overvalued.

The second most dominant big picture marker are rising interest rates, especially when coupled with a falling U.S. dollar – the reserve currency of the world.

The third most dominant big picture marker is the yen carry trades and the toxic derivative market it helps create.

Together the above three amigos make a most unholy alliance, one wrought with huge risks for the world’s financial and monetary markets and systems.

Almost unquantifiable and unqualifiable imbalances have resulted there from. These are the ingredients of a crack up boom that can only end most unpleasantly.

This is not doom and gloom scare tactics – it is simple Austrian economics and applied physics with the strong smell of chaos theory hanging in the air.

The subprime loan problem is the first noticeable symptom. The Saudi Stock Market is another. Worldwide rising interest rates are a third. The coup de grace, however, is the 450 trillion dollar derivative market – 8 times the size of collective global GDP. Caveat Emptor. 

Commodities

Commodity prices have begun to back up, including the grains, industrial metals, precious metals, and energy. Will the long term bullish trend grow stronger or will it top out? Either way bears careful watching. Higher food prices may be in the offing.

Oil looks like it could rise a bit further before correcting. Natural gas as well. I still think that the correction that ensues will be the time to accumulate new positions in these two sectors, as well as in overall commodities via BHP.

We will be recommending some oil and gas stocks when the right time approaches, SU being our most preferred. Buy weakness that holds support, not strength.

Gold & Silver

Gold and silver I remain neutral with a slight bias to the upside. More hard work needs to be done. If a week such as last week can be had again this week the charts will turn bullish. I remain slightly encouraged.

The Hui has my interest piqued. No matter what is thrown at it the Hui just keeps on coming back for more. This tells you that buying or accumulation is occurring. The higher lows also confirm that this is occurring.

An ascending right angle triangle is a very bullish formation; they almost always resolve themselves to the upside. I remain quite favorable to the gold stocks at this time.

Invitation

Stop by our website and check out the complete market wrap 40-50 pgs.), which covers most major markets with lots of charts for each.

There is also a lot of information on gold and silver, not only from an investment point of view, but also from its position as being the mandated monetary system of our Constitution - Silver and Gold Coins as in Honest Weights and Measures.

There is also a live bulletin board where you can discuss the markets with people from around the world and many other resources too numerous to list.

Drop by and check it out. Good luck. Good trading. Good health. And that's a wrap. The following link takes you directly to the full and complete market wrap. Full Report (click link to left).

 
Come visit our new website: Honest Money Gold & Silver Report
And read the Open Letter to Congress

Douglas V. Gnazzo

All Rights Reserved © 2007
Honest Money Gold & Silver Report 

Douglas V. Gnazzo is the retired CEO of New England Renovation LLC, a historical restoration contractor that specialized in the restoration of older buildings and vintage historic landmarks. Mr. Gnazzo writes for numerous websites, and his work appears both here and abroad. Just recently, he was honored by being chosen as a Foundation Scholar for the Foundation of Monetary Education (FAME).

Disclaimer: The contents of this article represent the opinions of Douglas V. Gnazzo. Nothing contained herein is intended as investment advice or recommendations for specific investment decisions, and you should not rely on it as such. Douglas V. Gnazzo is not a registered investment advisor. Information and analysis above are derived from sources and using methods believed to be reliable, but Douglas. V. Gnazzo cannot accept responsibility for any trading losses you may incur as a result of your reliance on this analysis and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities. Do your own due diligence regarding personal investment decisions. This article may contain information that is confidential and/or protected by law. The purpose of this article is intended to be used as an educational discussion of the issues involved. Douglas V. Gnazzo is not a lawyer or a legal scholar. Information and analysis derived from the quoted sources are believed to be reliable and are offered in good faith. Only a highly trained, certified, and registered legal professional should be regarded as an authority on the issues involved; and all those seeking such an authoritative opinion should do their own due diligence and seek out the advice of a legal professional. Lastly, Douglas V. Gnazzo believes that The United States of America is the greatest country on Earth, but that it can become yet greater. This article is written to help facilitate that greater becoming. God Bless America. 

-- Posted Tuesday, 19 June 2007 | Digg This Article