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Yamada - Here Are The Key Levels To Watch On Gold & Silver

With gold trading near the $1,725 level, and silver firmly above $32, today King World News is pleased to share a piece of legendary technical analyst Louise Yamada’s “Technical Perspectives” report. This information is not available to the public and we are grateful to Louise for sharing her incredible work with KWN readers globally.

Metals: Gold & Silver

By Louise Yamada Technical Research Advisors, LLC ("LYA")

October 31 (King World News) - Gold spot price (GOLDS-1,711.30) moved toward our next resistance at 1,800 before taking an expected breather (see Figure 13), and has moved below 1,750 toward 1,700-1,680 where price may stabilize above the 200-day MA. The daily momentum (not shown) is negative reflecting the consolidation underway but does not preclude further risk. The weekly momentum (not shown) remains positive but is rolling over, suggestive of a consolidation in progress unless a renewed Sell signal comes into place.

Were price to slip below 1,680-1,660 there could be further risk toward 1,600 once again with the 1,563 low representing the former and still critical support. Were the equity market to embark on a serious decline over the coming weeks / months, Gold has had a tendency also to experience selling pressure, so this should be kept in mind.

But the ability to hold support in the 1,700-1,680 range (and the 40-week MA support at 1,670), and begin to move up again, could indicate another attempt to address the formidable year-plus resistance at 1,800. A successful penetration should offer the potential to readdress the 2011 highs and move through and stretch toward 2,000, our longstanding target.

Silver – Following Gold’s Lead.

Silver spot price (SILV-32.09) has continued the expected consolidation and has pulled back to our first support near 32 (see Figure 13). Next support remains at 30 and as long as that level holds, the price could stabilize and later attempt to lift again to test Silver’s formidable two-year resistance at 35. Successful penetration could suggest a move toward the next resistance at 40. The weekly momentum remains positive, but also is rolling over, characteristic of a period of consolidation as long as a Sell signal remains at bay. Critical support remains at 27-25.

As gold was recently peaking, Yamada issued this cautionary note (see below), in her last report, which called for more consolidation before gold could move to new all-time inflation-adjusted highs (see chart below). That is exactly what has unfolded in gold. This is why institutions and wealthy investors pay Louise for her research. Yamada’s latest report is 47 pages and covers key markets from all over the globe.

Gold Adjusted for Inflation

Former resistance levels are generally important hurdles for price to overcome, and worthy of note is Gold history, adjusted for inflation in current dollars (see Figure 12). The adjusted price of Gold is now addressing the former 1980-1981 highs (800-850 dollars at the time). Therefore, it would not be surprising for Gold to do some further sideways consolidating before fully being able to penetrate those formidable levels before setting new, all-time, inflation-adjusted highs!

As Managing Director and Head of Technical Research for Smith Barney, Louise was a perennial leader in the Institutional Investor poll, and was the top-ranked market technician in 2001, 2002, 2003 and 2004, before going independent. To subscribe to Louise Yamada Technical Research Advisors, LLC ("LYA") CLICK HERE.

Eric King

KingWorldNews.com

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