I always find some time over the weekends to question or to analyze the irregularities and abnormalities of the last trading week to understand those "disturbances" somehow and, of course, to implement them into the trading plan of the following week. The relation between the silver and the gold rebound was extremely conspicuous last week. Silver performed three times better than gold.

Performance calculation gold vs. silver:

Gold:

Swing High: 1361

Friday close: 1349.1

% from low to Swing High: + 3.96%

% from low to Fridays Close: + 3.06%

Silver:

Low: 26.30

Swing high: 29.285

Friday close: 29.11

% from low to Swing High: + 11.35%

% from low to Fridays Close: + 10.68%

Conclusion: After intense internet investigation I can say this: The outperformance of silver seems to be the result of the high physical demand. It’s probably higher than it’s ever been before. About that I refer to the Zero-Contago situation in the Comex Silver Futures:

http://www.gotgoldreport.com/2011/02/near-zero-contango-in-comex-silver-futures.html#more

So what does all that mean as far as the targets and courses are concerned which we’ll have to expect this month?

The situation: After an intense test of the support Gann Angle silver closed above it in January. Simultaneously the setup-anchored green dotted support horizontal resisted. The February low is lying exactly on the intersection point of the support Gann Angle and that very support horizontal which is a price and time magnet, or a cross support in TA terms. If we see a rebound from that magnet according to Gann it means A) it’s an extremely important support and B) the rebound from it cannot be ended before the next price and time magnet. Since above the price only the 3rd double arc is floating we should reach this one. So the target is 31$ for the moment. In the further course of the month we’ll have to observe the silver performance around the main target to draw more conclusions on the further possible targets.

Gold is offering a far more negative impression. There are many resistances above the price making clear why gold can’t join the silver rally at one to one.

On Friday, shortly before the employment numbers were published in the Gold Trader GUNNER24 prognosticated the intraday low at 1347. That was the intraday buying mark. Target for longs are 1362 since the low of 1309. And what happened… The Friday low was "only" and exactly at 1361…besides, unlike the silver, the gold future did not close near the day high. It’s the anomaly in the market mentioned at the beginning.

Considering the actual monthly setup we see why intraday such a violent rebound happened exactly at 1361 (and not at 1362…). We went to a monthly resistance, in silver unfortunately such doesn’t exist anymore on this time level. Since obviously gold is expected to have a lot of important monthly resistances may be silver is going to be quoted at 30$ whereas gold is keeping on below 1361. But if the 1361 are taken the targets above should be called at quickly. Perhaps for just one day again but then another violent rebound should follow. For intraday trading that means further that rebounds from important silver resistances like last Friday should lead to even more violent rebounds in gold. Strange!

All the same we see that definitely a rebound at the Gann Angle support happened. Not as strong as in silver, but it did. According to Gann the price and time supports should not be broken before the fourth attempt. In the case of gold that would mean it won’t happen before March or April 2011.