This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

The Next Major Move in Precious Metals Is Close

NEW YORK ( TheGoldAndOilGuy.com) -- After making new highs about a year ago we have seen silver and gold consolidate for roughly the last 12 months.

Technically, it would typically be a bullish scenario with gold from the standpoint that the last 12 months' price action was a sideways consolidation in a bullish pennant formation.

However, over the last year we have witnessed a series of lower highs and increasingly tested supports levels around $150 on gold that raises caution.







With the Federal Reserve pulling any extensions on further quantitative easing in the form of QE3 or other programs, the bullish case has lately been criticized.

However, I am still a firm believer that gold, in most respects, is a currency, and the only one that can maintain its value. There are very serious issues looming in Europe and across the world that are far from resolution. With few tools left in the toolbox to stimulate world economies, further easing can never be ruled out.

Silver, after breaking through strong resistance around $19 to $20 in September 2011 went almost parabolic in spring 2012 prior to giving up most of its gains in the last year. There seems to be significant support around $26 on silver.

However, this level has been tested quite frequently over recent months, and this again raises caution. While silver owes some of its moves to its industrial application, the high correlation between the two metals is not to be ignored.







I think the long-term trade will be long in both metals, but I'm waiting to see a significant breakout out of these consolidations on heavy volume to confirm a direction.

I would like to see both precious metals break out of their respective consolidations and ultimately have further confirmation in the U.S. dollar.

Any major headlines over the next couple of months involving Europe or quantitative easing may provide us with the trigger for the next big move.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Chris Vermeulen is founder of the popular trading sites www.thegoldandoilguy.com and www.ActiveTradingPartners.com. There he shares his highly successful, low-risk trading method. Since 2001, Chris has been a leader in teaching others to skillfully trade in gold, silver, oil and stocks in both bull and bear markets.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,809.46 -5.48 -0.03%
S&P 500 2,069.32 +2.29 0.11%
NASDAQ 4,773.30 +15.0480 0.32%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs