By Kevin Wides Out Of Switzerland

February 19 (King World News) - Last week may well have been be the defining week and month for both Gold and Silver.  Let’s look at the facts presented by the charts.

Gold Monthly

Gold:  Markets tend to move in 5 waves, 3 in the direction of the trend (waves  1 - 3 - 5 ) and 2 against trend (waves 2- 4).  The important thing to note here is that wave 5 on gold’s monthly bull chart has not occurred yet.  Waves 2 and 4 show alternation in price action, which is indicative of countertrend moves in the 5 wave cycle.

Based on waves 1 and 3, wave 5 could very well have a $3,500 to $4,000 target because 5th waves in commodities tend to be very extended to the upside (see chart above).

Sentiment can be a fantastic contrary indicator.  When there are extreme bearish readings, it generally implies the market is close to running out of sellers.  2014 started with extreme bearishness in Gold, as Goldman Sachs called it “a slam dunk” sell for lower gold  prices in 2014....

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But markets tend to change direction after testing price levels twice, commonly referred to as double bottom or double top, and gold now has a double bottom at $1,180 (see chart below).

Gold Weekly

It is import to note that gold made a key weekly reversal at $1,180, and that gold has also broken the bearish downtrend.  Gold has also completed a clear 5 wave decline from $1,920 high, indicating a price reversal and most likely a trend reversal.

Silver:  Like gold, silver is also missing a final wave 5 rally (see chart below).

Silver Monthly

Silver has broken the current downtrend, and silver has competed a clear 5 wave decline from the $49 high of April 2011, indicating a price reversal, and most likely a trend reversal (see chart below).

Silver Weekly

The major breakout level of $19 to $20, from 2010, has offered major support.  It is technically very significant that this area held.  Silver also made a double bottom at the $19 area (see chart above).

Conclusion:  Note gold and silver have broken and closed above their 200-day moving averages (not shown), as well as numerous other short-term indicators that are indicating higher prices ahead.  The fact that all time frames are indicating bullish price action is very unique.

The amount of technical evidence that indicates continued price rallies for both gold and silver is overwhelming.  In fact, with extreme bearishness and complete underinvestment by Western market participants, the price moves could be quite substantial to the upside.”

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IMPORTANT - KWN will be releasing interviews all day today.

The audio interviews with Michael Pento, Art Cashin, Rick Rule, David Stockman, John Mauldin, Eric Sprott, Bill Fleckenstein, Egon von Greyerz, Dr. Paul Craig Roberts, MEP Nigel Farage, James Dines and Dr. Marc Faber are available now. Other recent KWN interviews include Jim Grant and Felix Zulauf -- to listen CLICK HERE.

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© 2014 by King World News®. All Rights Reserved. This material may not be published, broadcast,

rewritten, or redistributed.  However, linking directly to the blog page is permitted and encouraged.

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