With the gold and silver surging $20 and 40 cents respectively, today King World News is pleased to present an important update on the war in the gold market from Michael Oliver at MSA. Oliver allowed KWN exclusively to share this key report with our global audience.
By Michael Oliver, MSA (Momentum Structural Analysis)
April 11 (King World News) – Annual momentum turned positive in February 2016 (circled). The post-breakout surge halted at levels that didn’t mean anything to momentum.
(charts by Momentum Structural Analysis, LLC www.olivermsa.com)
Back in 2012 momentum broke sufficient uptrend structure on the yearly opening for this report to go major negative on gold. However, in that wasted year gold defined a horizontal momentum level at 18% over the 3-yr. avg./zero line (horizontal black line), which it tried to defend. On the 2013 opening that secondary structure came out and gold crashed by mid-year. That floor at +18% is now our first layer of momentum resistance (probably a hiccup point for gold). In price terms this year it converts to $1428. That would be a reasonable place to watch for any resistance, though it will likely be transitory…
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The level that indicates a drive to that 18% oscillator level is exceeding last year’s momentum high. Last year’s price high was $1377.5, but annual momentum will match last year’s oscillator high by trading to $1309. By touching $1321 momentum will exceed last year’s oscillator high on a full percentage basis (short black line). Even trading to last year’s momentum high is a strong hint of further gains.
This Will Immediately Signal Gold Is About To Surge To $1,700
We’ve pointed out that if the price chart also takes out last year’s high of $1377.5, then there will be a large head-and-shoulder bottom on the price chart, no doubt noticed by many. Momentum agrees that it’s probably a valid technical feature (even if lagged to momentum technicals). Its swing objective is around $1700.
In any case, we wanted to update these two markets and identify secondary long-term add-on signals for silver and gold—based on annual momentum (noted in red).
Gold and silver have made much upside progress since their bear lows of late 2015, and they’ve done it without any help (weakness) from the U.S. Dollar.
But it is now MSA’s view that these next annual momentum trigger levels for gold and silver will probably be held in abeyance until the Dollar does the deed and breaks its annual momentum uptrend, which we defined as a monthly close at or below 99.
King World News note: When the dollar breaks and closes below the 99 level on a monthly closing basis, that will be a tremendously bullish signal for both the gold and silver markets.
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