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« Hecla Mining: Short-term buy! | Main | HSBC raise forecast for gold to $915! »

Gold and Silver fail to make new highs

Gold and Silver 28 May 2008

The merry month of May has almost gone but not without tossing us a surprise rally which commenced on the 1st of May and put on $75/oz before hitting the brakes yesterday when it fell back to close at $906.15/oz.

The old adage of sell in May and go away appeared to reverse for most of the month. Maybe they went early this year as gold dropped a $100/oz in the second half of April.
The next week or two should offer us some clues as to whether or not we are in for a dull summer of sideways consolidation or a resurgence of the rally. Either way gold will be dramatically higher by the year-end so don’t lose your concentration.

Gold Chart 28 May 2008

What should be noted from the chart is that gold failed to make new highs after topping $1000/oz, despite making three attempts at doing so. Each peak on the chart is lower then the previous peak, which could be suggesting that gold, is stepping back and taking a breather for now. It’s a dangerous time to step out of the market completely as gold may just be looking to pick its shots rather like a professional boxer half through a bout. So, we will continue to maintain our core position regardless and look for a short-term trade by buying an oversold gold or silver stock that could bounce in the very near term.

Yamana Gold dropped 4.49% yesterday and could well re-visit its 200dma, which stands at $14.04 as of the close, see keep an eye on it we may have to move fast. Kinross Gold is also heading south and getting close to its 200dma, which it bounced off at the start of the month for a three-dollar rally. Agnico-Eagle is still thirteen dollars above its 200dma but you never know!

For a short-term buy on a silver stock we are watching Hecla Mining, which has crashed through its 200dma to close at $9.19 yesterday. However silver has failed to overcome resistance at the $18.50 level and may go lower, again stay alert, as we will need to move fast.

Have a good one.

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Reader Comments (2)

Nice writing style. Looking forward to reading more from you.

Chris Moran

May 27, 2008 | Unregistered CommenterChris Moran

Gold will not go below $845

May 28, 2008 | Unregistered CommenterJaykishan

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