Charts in this report are courtesy Stockcharts.com unless indicated.
Historically the precious metals prices drift lower during the summer months, with a bottom in July, although sometimes not until August. At this time of year demand from India is less because the festivals are over and demand from jewelers is low because of summer holidays. Investment demand is also down because buyers are expecting a correction.
This historical precedence (low summer prices), has been nourished by a number of analysts. (Any connection between the names used in this essay and living persons is purely coincidental). ‘Low-price Larry’ has predicted a collapse in the gold price since early this year. ‘Oriental Steve’ predicted on May 7th that gold and silver would drop to their 200 day moving averages by July 7th.
In 2009, ‘craptal Dave’ predicted that silver would drop sharply. (The price rose instead). He called for a major long term top at the end of his 64 month cycle to occur in February of 2011. Gold refused to comply and has risen 10% since then. Last we heard of ‘craptal Dave’ he shorted gold at the end of June at $1515, hoping for a drop to $1462. It has been rumored that he considers his craptal system to be more effective than fundamentals.
DISCLAIMER: Please do your own due diligence. Investing involves taking risks. I am NOT responsible for your trading decisions.
Happy trading!
Peter Degraaf is an online stock trader with over 50 years of investing experience. He publishes a daily and a weekly report for his many subscribers. For a copy of a recent report you may send him an E-mail or visit his website www.pdegraaf.com
-- Posted Monday, 11 July 2011
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