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Are Precious Metals in Their Final Run Up?

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The first half of December will include important extremes for silver and the USD Index .

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In this case, the target would be above 0.75 -- above the 2008 high. Naturally, I expect this to mean higher silver prices in USD as well.

However, this isn't likely to take place immediately, as the ratio has just reached one of the important resistance levels -- the July 2008 high. This means we may need to see silver trade sideways before a more significant move. Today's price action seems to confirm this.

Moving on to the situation on the Dollar market, let's begin with the long-term chart.


Source: Stockcharts.com

There are no big changes on the above chart since I featured it in the October 30 Premium Update, but I decided to provide you with this chart anyway, as it helps to put things into proper perspective.

The size of the current downswing is still not very big when one analyzes it from the very-long-term perspective, so I don't think that a rally from here is imminent.

Consequently, gold and silver may rally in the long run despite their short- or even medium-term weakness.


Source: Stockcharts.com

The situation on the USD Index evolves in a predictable fashion. So far, the USD Index has been trading lower between two blue borders of the trading channel.

The seasonal tendencies suggest that the US Dollar is likely to put a top (more likely) or a bottom in the first half of December.

This could mark the end of the correction in the precious metals, or at least the end of the first part of the correction. I'll let you know once we get more information.

Summing up, the bull market in the precious metals -- including the silver market -- is healthy, but it seems that the most probable scenario in the short term is a consolidation.

The analysis of the cyclical tendencies in silver and the USD Index suggests that the first half of December will include an important extreme for these markets.

I'll leave additional details for my subscribers. I encourage you to join us today -- this week's Premium Update includes detailed analysis of 19 charts, and subscribers have access to all previously posted updates.

To make sure you're notified of new features (like the newly introduced Free Charts section) and get immediate access to my free thoughts on the market, including information not available publicly, I urge you to sign up for my free e-mail list. Sign up today and you'll also get free, seven-day access to the Premium Sections, including valuable tools and charts dedicated to serious precious metal investors and speculators. It's free and you may unsubscribe at any time.

Thank you for reading. Have a great and profitable week!


No positions in stocks mentioned.
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