http://www.dailymarkets.com/contributor/2010/11/17/are-gold-and-silver-charts-signaling-the-start-of-a-deeper-reversal/

Are Gold And Silver Charts Signaling The Start Of A Deeper Reversal?

Corey Rosenbloom on November 17, 2010 | More Posts By Corey Rosenbloom | Author's Website

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What levels should we be watching in Gold and Silver prices to see if this pullback phase is just an expected and overdue retracement… or perhaps the start of a deeper reversal?

Let’s take a quick look, starting with Gold:

A sort of semi-indicator free pure price look reveals that the initial level to watch is the rising 50 day EMA, currently situated at the $1,330 level. It held so far as support on Tuesday, but watch closely what happens here.

There’s prior price support at the $1,320 level from multiple successful tests (inflections) off that price, so gold could hit that level if the 50d EMA initially fails.

What then? A breakdown under the $1,320 price and EMA support leads to a test of the ’round number’ level of $1,300, which provided slight resistance before the powerful and decisive breakthrough on September 28.

An eventual price breakdown through $1,300 argues in favor of a potential short-term price trend reversal that could see the $1,260 or even $1,200 levels realized over time.

Of course, if price supports at the $1,320 level, then the uptrend would continue and this would be nothing but a standard pullback. That’s what the $1,320 and $1,300 level are key to watch.

Silver has its own important level to watch:

Silver’s level is a bit more obvious than gold’s, as the chart forms a distinct confluence at the $25 level.

That’s because the 20 day EMA rests currently at $25.39, but also as important, the October swing high rests at $25.00.

The $25 level also provided minimal resistance in early November prior to a power-break through that level.

So, buyers/bulls need to hold the $25 level to keep this up-move going. Any breakdown under $25 immediately targets the 50 day EMA – similar to the logic I used in this morning’s

post on the S&P 500 and the 20/50 EMA targeting method

.

That would of course be a short-term target, and any move under $23 would place the trend in jeopardy of reversing.

Breaking under $23 shatters the 50 day EMA and then the prior swing low from mid-October at the same level. Watch $25 initially, and then $23 if a steeper pullback does occur.

As always, what happens to one is likely to happen to the other, so both gold and silver will either hold these levels… or break them. Determine if you may need to adjust accordingly.

 For graphics for the previous article you'll have to use the link

At this time into a correction phase i understand we want to be carefull about the future outlook . What the average price of gold will be in 2011 will remain a guess for a while longer .

I put my faith on the upside . The US $ being the main reason . The first QE had a similar effect as people flocked to the mighty dollar following initial fears , then they had second thoughts considering the long term effect of debasing the US dollar with printing money .

As the american public increases it's hold of the long term US public dept through treasury's buying , the rest of the world can't help but figure the US population is buying a bad debt ! then fear takes hold and precious metals increase . i think something similar is happening again .

Tec