Gold and Silver Breakout: False or True?

Is the gold and silver breakout materializing now a false or true breakout? Here’s what I had to say about spot silver prices a few weeks ago in my free newsletter: “Silver [was] smashed considerably lower than $15.68 to $14.34, but that smash, as I had predicted, literally only lasted but for a New York minute, as most of the smash from above $16.00 an ounce to $14.34 was literally regained in just a few minutes.” And since then, silver has risen from that smash low of $14.34 by a whopping 22.2% in less than two months to its current price of $17.52 as I write this sentence. I also wrote in these free newsletters that interest in gold and silver assets, due to cryptocurrency price spikes, are at lows that rival the lack of interest during the 2008 financial crisis, when Central Bankers smashed gold lower than $700 an ounce and silver to sub $9 an ounce prices. I stated a month ago that the extreme level of disinterest in gold and silver assets, given their wealth preservation qualities that have withstood centuries of time and the current escalation of the global currency war, was quite ludicrous. I further stated that the low prices of gold and silver assets were a bargain that everyone was overlooking, and continue to overlook today, given the instability of the global fiat currency system and due to the ongoing mania in cryptocurrency prices. And I still believe that gold and silver asset prices will boom in the coming future, even though many previous gold and silver bugs have completely given up on gold and silver and even mistakenly traded in their ENTIRE physical gold and silver stacks for cryptocurrencies today.

The extreme efforts of the global Central Banking cartels to continue to control gold and silver prices, including the massive dump of gold and silver prices to cause huge price spikes downward, pre-Janet Yellen speech last Friday, continue to clearly illustrate that the number one threat to their fiat currency system is not any cryptocurrency, but physical gold and physical silver. The intolerable and unacceptable situation taking place in Venezuela, where it has been reported that 3 out every 4 people in the country has lost an average of 8.7kg of weight (nearly 20 pounds) in the past 12-months, illustrates the most dire effect of the Central Banker-led currency wars, in which they have destroyed the purchasing power of the Venezuelan bolivar and destroyed most of the savings of people in their country, even though the mass media is squarely and falsely laying all the blame on their citizens’ dire financial condition at the feet of their current and former Presidents.

In any event, let’s take a quick look at a couple of charts below to determine if the gold and silver breakout is true or false. We see that gold’s break above $1,300 was a very important break not because $1,300 is a nice even number, but because the five previous weeks this year (the circled weeks on my chart) gold tried to break through this barrier, Central Bankers rebuffed each prior attempt. Central Bankers’ meddling in gold and silver futures markets are one of the primary reasons that gold and silver breakouts often experience “false” positives in their breakout patterns.

Furthermore, as the below chart is a weekly gold chart, I am not even illustrating the multiple times in daily gold charts in which gold has been rebuffed multiple times in past weeks during daily trading sessions when it approached the $1,300 mark. Of course, the end of each month is a historically week performance period for spot gold and spot silver prices, so even if bankers attempt to rebuff gold and silver prices again in the next few days, if gold can close this week above $1,300, that is all that matters. If this happens, then this will be a very positive development and the likelihood of a false gold and silver breakout significantly lessens. If it is pushed back below $1,300, then once again, the sustainable upward trend in gold prices will have been delayed. However, several weeks ago, spot gold prices already broke above its 50 and 200-week average as well as above its weekly downward trend line. Thus, a weekly-close above $1,300 this week, followed by another weekly close above $1,300 the next week will be a very important development.

Regarding silver, every time bankers have dumped paper silver in the silver futures markets in London and New York to suppress prices this year, that silver has rebounded, but each time, only rebounded to previous levels or topped out at a lower high. You can also see that weekly silver, with yesterday’s significant price rise, broached both the 50 and 200-week averages in one day, but even if silver prices are pushed back below the 200-week average in the next few days, as long as it stays above the 50-week average at week’s end, this will be a very positive development for silver. You can also see a red rectangular box I’ve drawn in the chart below, as the weekly silver spot price will need to continue to rise and close within this rectangle to close at a higher high after suffering a price knock down, something it has not done all year. This will be a very positive development when it happens before year-end,and will confirm a gold and silver breakout as being legitimate. As well, if the silver spot price can broach the top of that rectangular price range, this event will be strongly significant towards the building of a sustainable higher silver price trend.

silver breakout
silver breaking out or too early to say?

J. Kim

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