3SOF

Silver...

Silver is out-performing gold, with Relative Strength rising strongly. Breakout above $25/ounce after a short retracement to $23 warns of an accelerating up-trend which could lead to a blow-off.

* Target calculation: 20 + ( 20 - 15 ) = 25

Silver...

Silver continues to out-perform gold, with Relative Strength rising strongly. The accelerating up-trend runs the risk of a blow-off, especially if there is no retracement to test the new support level at $25.

* Target calculation: 25 + ( 25 - 23 ) = 27

Silver...
Silver also shows a bearish divergence on Twiggs Momentum (21-day), warning of a correction with a target of $20/$21. Failure of support at $28 would confirm.

Silver...

Silver also shows a large bearish divergence on Twiggs Momentum (21-day), warning of a correction with a target of $25*. Failure of support at $28 would confirm.

* Target calculation: 28 - ( 31 - 28 ) = 25

Silver...

Silver is retracing to test the new resistance level after breaking support at $28/ounce. Expect a correction as signaled by the large bearish divergence on Twiggs Momentum (21-day).

* Target calculation: 28 - ( 31 - 28 ) = 25

Silver...

Silver found support at $26.50/ounce. Breach of the descending trendline suggests that a bottom is forming. A rally above the descending trendline on Twiggs Momentum (21-day) would confirm.

* Target calculation: 28 - ( 31 - 28 ) = 25

Silver...

Silver is headed for another test of resistance at $31/ounce. Breakout would signal an advance to $35 — and further bullishness for gold. A trough above zero on Twiggs Momentum (21-day) would strengthen the signal.

* Target calculation: 31 + ( 31 - 27 ) = 35

Silver...

Are Silver Prices Ready to Break Out?
On Monday February 14, 2011, 3:04 pm EST
NEW YORK -- Gold prices were looking for direction Monday while silver prices plowed higher.

Gold for April delivery settled $4.70 to $1,365.10 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has stayed confined to its tight range trading as high as $1,367.50 and as low as $1,354.40. The spot gold price was popping more than $5, according to Kitco's gold index.



Gold prices were seeing mild safe haven buying as political unrest exploded in Bahrain on the back of a resolution in Egypt.

Scott Redler, chief strategic officer for T3Live.com, says that a close above $1,368 would provide a long entry point. Gold closed just shy of that level Monday.

Silver prices added 53 cents to $30.53, which makes four closes above $30 in the past week. The big story on silver Monday was that future contracts were in backwardation, a situation in which prices in front months were higher than those further out.



Silver's March contract closed at $30.53 while December's contract settled at $30.39. According to experts, backwardation rarely occurs in the metals market and points to a physical supply crunch in the short term.

"Right now we are near a breakout. It could take place," says David Morgan, founder of Silver-Investor.com. "Silver is as tight as I have ever seen it, physically ... As long as the holders of physical silver are unwilling to part with it at $30 ... any new buying is going to take the price higher."

If silver does break out past the $31.50 to $32 level, the metal could leave gold in the dust. Due to its volatility, silver can outpace gold to the upside and downside. Gold rallied 26% in 2010, while silver popped 80%. While gold must contend with a triple top, silver doesn't have that technical headwind. Price estimates for silver range from $35 to $45 for the year.

"You could see silver really take off and gold not do a whole lot," says Morgan.

The U.S. dollar index was adding 0.24% to $78.63, which was holding gold prices down a bit, while the euro slid 0.54% to $1.34 against the dollar.

This week will hopefully provide direction for gold, which has been undergoing an identity crisis this year. It's not being purchased as much as a safe-haven asset, with today's buying modest compared to double digit rallies, and it is not attracting big buyers as an inflation hedge.
The U.S. on Wednesday will release its Producer Price Index for January and its Consumer Price Index on Thursday. Both of these figures will provide inflation data for the U.S., one of the only countries not reporting substantially rising prices.

The U.S. only counts the core readings as inflation, excluding food and energy costs, which are deemed to be too volatile. But it's those commodities that are hurting profit margins from companies like Ford, ConAgra and Pepsi, despite the fact consumers haven't felt the rise in price.

China also reports its inflation number on Tuesday. Currently, inflation in the country is 4.6% compared to inflation in Brazil of 5.99% and 3.7% in the U.K.

Typically investors turn to gold when they are scared of inflation, but the problem is that gold's 2010 rally priced in future inflation as investors panicked over rising deficits and stimulus. If inflation readings are high two things can happen -- gold could rally, or gold could stay flat as those wanting to buy gold as a hedge have already done so.

If inflation in the U.S. is much higher than its current 0.8% reading, the pressure could mount for the Federal Reserve to cut its $600 billion bond buying program or raise key interest rates.

Gold "still has strong overhead resistance to conquer at the 50 day moving average and ... rising Treasury yields and the expectation of rate increases potentially drawing some investors away from gold as a safe haven," says James Moore, analyst at FastMarkets.com.

A handful of the big gold miners including Barrick Gold, Agnico-Eagle and Kinross Gold will report earnings this week. Investors will be looking for not only how much gold these miners will produce but at what cash costs and how they are protecting themselves against a non-rising gold price.

Gold mining stocks, a risky but profitable way to buy gold, were higher. Kinross Gold was up 0.24% at $16.48 while Harmony Gold added 0.47% at $10.70.

Other gold stocks New Gold and Gold Fields were trading at $9.34 and $15.88, respectively.

Silver leads the way

Silver...
Silver broke through resistance at $31/ounce, indicating an advance to $35*; a bullish sign for gold. Retracement that respects the new support level would confirm the signal. Penetration of the descending trendline on Twiggs Momentum (21-day) suggests continuation of the up-trend.

* Target calculation: 31 + ( 31 - 27 ) = 35

Silver...
Silver's brief consolidation, between $32.50 and $34.50 per ounce, is another bullish sign. Breakout above $34.50 would indicate that the up-trend is accelerating

Target calculation: 31 + ( 31 - 27 ) = 35

Silver...

Silver continues its strong rally: a bullish sign for gold.

* Target calculation: 31 + ( 31 - 27 ) = 35

Silver...
Silver broke through resistance at $36.50, while Momentum is rising strongly. Gold is likely to follow.

* Target calculation: 36.50 + ( 36.50 - 33.50 ) = 39.50

Silver...
Silver is consolidating above support at $36.50 — a bullish sign — and breakout above $38 would indicate a test of the upper trend channel. Breakout below the trend channel would, however, confirm the bearish divergence on Twiggs Momentum, warning of a correction.

* Target calculation: 36.50 + ( 36.50 - 33.50 ) = 39.50

The Silver Trade Is Taking Off !
There you have it folks...new all-time highs for Silver:
Silver is now hitting all-time highs instead of 52-week highs.

Silver expected to reach $50 an ounce soon...
Monday April 25, 2011

Silver prices have doubled during the past six months, and are now within spitting distance of $50 an ounce, a key level for the precious metal.

Early Monday morning, silver prices surged 8% to $49.82 an ounce. That was just shy of the $50.35-an-ounce intraday record hit in January 1980, but higher than the all-time high closing price of $48.70 per ounce set 31 years ago.

As the trading session went on, prices pulled back from the lofty levels, with silver finishing the day up 2.4% to settle at $47.15 an ounce.

"The metals are getting a lot of attention right now," said Terry Hanlon, president of Dillon Gage Metals, a precious metals trading firm based in Dallas. "We'll run right through $50 per ounce for silver any day now, and two months from now, we won't even remember it as a benchmark."

Gold prices also continued to shine in record territory, rising 1% to hit a fresh intraday high of $1,519.20 an ounce before settling up 0.4% at a record close of $1,509.10 an ounce.

Both gold and silver, which is often called the poor man's gold, have taken on the role of currencies as the dollar loses its luster and inflation fears run wild, said Hanlon. He expects gold to top $1,700 an ounce and silver to reach $75 an ounce within a year.

"This is a huge safety play," he said. "Investors can't sit on their cash anymore because the value of the dollar keeps deteriorating. To offset that, they're parking money in precious metals."

The dollar index, which measure the greenback's value against a basket of currencies, has fallen more than 6% in 2011.

A number of factors are driving investors away from the dollar and toward safe- haven investments such as gold and silver. Among the reasons are deficit problems in the United States and Europe, and rapidly rising food and commodity prices, especially in emerging markets.

Ongoing political tensions across the Middle East and North Africa also have investors on edge.

"As long as these problems continue to simmer and occasionally surface, we'll see more safe-haven demand from investors for precious metals," said Jeffrey Nichols, managing director at American Precious Metals Advisors.

Nichols, who considers himself to be particularly bullish, says gold prices could reach $3,000 an ounce within the next few years, as silver prices double to nearly $100 an ounce.

But those levels won't come without major hiccups -- 10% to 20% short-term pullbacks -- along the way.

And, when adjusted for inflation, gold and silver prices still have a long way to go. Gold rose to $825.50 per ounce on Jan. 21, 1980, which is $2,238.74 in today's dollars, according to the government's CPI inflation calculator. Meanwhile, silver's inflation adjusted price peaks at $136.55 per ounce in today's dollars.