Now, finally it did happen: After several months of consolidation gold and silver are leaving their bottoming patterns like rockets. Now they are likely to go on joining their well-known seasonal patterns with the following guideline: September is often the strongest month of the year. In October follows a quite cracking pullback, at the end of October/beginning of November starts another rally that lasts at least until February, frequently through April. The pullbacks during this period take place rather moderately or they hardly carry weight, respectively.

Last week I was pretty convinced that the precious metal rally was to take a rather tenacious and boring course til end of 2012. The reason for this assessment was the ultra-strong resistances that gold was still confronted with 7 days ago.

The most important resistance was the combined weekly and monthly resistance at 1655. See GUNNER24 Forecasts of 08/19 and 08/12.

From my point of view such a resistance was unlikely to be overcome fast. You were wrong, Mr. Altmann…

Within today’s issue, at any rate I’d like to avoid singing from the same hymn sheet as many, many fellow analysts use to who – as soon as the metals once rise by a 5% in two days – quickly postulate super-important changes, by virtue of the super-bullish indicator or oscillator situation conjuring breathtaking price that nearly always crack the existing all-time highs.

With the following analyses I don’t want you to get the impression "Oh, he’s gone mad now", no: since I always trade myself what I publish within the GUNNER24 Forecasts the forecasts are always "my plan" as well that I try to carry out. In the daily fight a longterm plan that is really represented by every issue does a lot of good to me… it contains important targets, supports, resistances and timing milestones I’m always absolutely convinced of.

Otherwise I wouldn’t open them to you publishing them. By publishing I always accept some responsibility for your money decisions, gentle client. I’m absolutely aware of that…

 

 

The most important thing I impart in this issue is this: The precious metal rally is MOST LIKELY to last at least until February 2013, maybe longer. The message of the introduction above that this year, too, the precious metals are supposed to join their seasonal patterns is backed by the weekly 8 Candle GUNNER 24 Up Setup on the one hand.

For me the fact that with the last weekly candle the gold market came off that impressively from the first double arc is the last proof that this first double arc is "definitely" provided with long-lasting and above all extremely strong rebound energy. Correspondingly its support function should last until the beginning of February at least. And not before its temporal support function ends the market may (but doesn’t have to!) fall low.

At any touch the first double arc would have to force gold upwards, and at the end of the temporal influence of this double arc the final high of the entire up move might happen. Actually that means for you: Whenever gold corrects touching the upper line of the first you’ll have to increase the longs because we have to work on the assumption that immediately strong rebound energy has newly to arise by the touch of this support. It would take a weekly close below the first double arc to make the emergence of a downtrend possible.

Before I show you another proof, a "monster-evidence" for possible precious metal tops in February here’s yet a brief word on the actual weekly candle: This one closed clearly above the 1*1 resistance angle being gold now in the upper half of the setup, a weekly buy signal! That in addition the monthly 1655 resistance (here and here is the importance of the resistance) was overcome is another buy signal.

If gold ends August above 1655 we’ll have a monthly GUNNER24 Buy Signal so we’ll go long with another tranche! That also the weekly down trendline (purple) was overcome means a strong buy signal as well.

The next weekly buy signal would arise in case of a weekly close above 1678. Then it will go up smoothly to the 1735 target at the 1*2 resistance Gann Angle. The 1*2 is the target of this swing. Before reaching the 1*2 and 1735 no lower correction on weekly basis is expected to happen. The 1678 is a strong natural resistance as well in the setup above as in the actual weekly 13 Candle GUNNER24 Up Setup that was just considered last week. See here…

In case of a dayly close above 1685 the weekly 1678 resistance would have overcome finally going up gold rapidly to 1735.

Platinum – Awesome!

Being the first precious metal to breakout upwards platinum did as early as the week before last. Its rev-up happened the day when the mine workers were shot. Within the past years platinum was often the metal that turned, topped, fell or accelerated first of the four precious metals. So newly it is the one we have to quote implicitly to classify the expected gold and silver rally in terms of pricing and timing.

Bill Wolfe and Brian Wolfe are the discoverers of the Wolfe Waves patterns. A Wolfe Wave (WW) is a predictive pattern used in technical analysis. Die WW is a natural rhythm of the markets that is found in all time frames. There’s a Bearish WW and a Bullish WW.

On the basis of certain wave formations in the past the pattern puts out pretty exact future price and time targets. It’s a very reliable pattern. When I identify one while trading I’m always delighted for the pattern is met at a T with an 80 per cent of probability according to my experience.

Here’s the exact definition of the Bullish WW:

 

 

Source: http://www.wolfewave.com/an_illustration_along_with_the_rules.htm

The daily platinum now produced a perfect Bullish WW during its consolidation, absolutely according to the rules. Frequently the starting sequence is difficult to identify because it may show quite a few derivations from the perfect setup structure. In this case it isn’t, the points 1-5 are showing the perfect wave structure. Very rarely the patterns develop in the daily time frame. It’s really a big present for any trader and investor:

 

 

You see, from the temporal point of view the upper intersects the lower trendline by the end of February 2013. For the moment that’s the most important for me. The time is pointing to the aspect that besides gold also platinum is supported by bullish forces through the end of February.

At least for the moment I can’t cope with the probable consequences of this Bullish WW respecting the Estimated Price at Arrival (EPA). Is that really possible? The platinum all-time high is at 2308.80; depending on how gold and silver are going to perform during the coming months in relation to platinum we’ll have to reckon "merely theoretically" with gold and silver newly reaching the all-time highs until February.

If the actual gold/platinum relation keeps continuing in February 2013 gold would be quoted at 2300 or so in case platinum is at 2200. But maybe this possible platinum rise is already suggesting the QE3 – or just the expectation of the market that the platinum supply is going to run short extremely in the coming months… But even if a shortage of supply of platinum is expected in this narrow market gold and silver will have to follow platinum upwards possibly reaching 2000$ or 40$ respectively until February.

At any rate all the precious metals may explode now – and the Bullish WW is backing this theory. This might become the trade of the year. The monster up-wave might come not being able to top before February. It’s time to load the boat. And during the profound corrections refueling is a MUST!

As a completion now – after the possible longterm consequences of the current rally are illuminated – the shorter-term weekly targets/supports and resistances in gold and silver. Let’s consider about this the the actual weekly up setups since the May and the June lows respectively:

 

 

The last week in the weekly 5 candle up is showing a clear buy signal. The upper line of the first square was broken. We bought at 1673 on Friday. The closing price within the first double arc is preparing the reaching of the 2nd double arc. A closing above the first double arc would activate the 1735 finally.

The first interval in the uptrend is supposed to be rung in by the 1735. A final break of the 2nd would activate the 4th double arc as the main target of this uptrend. Gold is expected to top there, probably in March 2013 at 1885. ANY weekly correction down to the 1*1 angle will have to be bought there. On daily basis next week an entry into the longs at 1659 (actual support Gann Angle) and above all at 1640 – at the upper square support - can be done.

In case gold corrects to 1640 within the next 10 trading days we’ll go long there, too, with a daily position. SL is 1600, daily close, target 1885.

If gold produces a daily close above 1685 next week the weekly high at the actual resistance Gann Angle at 1704 would have to happen. Prices above 1710 next week would intensify the uptrend, the 1735 might be reached at the end of the next or beginning of the week after next in that case.

 

 

Silver produced a triple buy candle. In one step the upper line of the first square was broken as well as the 2*1 angle and the first double arc. In the weekly time frame it’s very seldom to analyze a triple buy candle. Such candles are the expression of an extreme up-pressure or an extreme short squeeze… A weekly close above 31.45 next week would activate the first target of our long-engagement = 32.90 (thence monthly resistance). If next week closes clearly above the actual resistance angle and above the horizontal resistance at 31.60 we’d have a new acceleration of the trend. The main target of the swing is expected to be at about 35.50 (4th double arc) in that case.

The strongest silver support is the 29.60. It is visible in the weekly setup above, but that’s where also the lower line of the 2nd double arc in the monthly 21 Candle Up Setup, passes that is likely to exercise a very strong monthly support now. If next week the 29.60 are reached in the tide of a possible correction we’ll go long there on daily basis. If next week closes above 31.45 we’ll go long with another tranche. First target is 32.90, main target at 34.90.

Would you, too, like to profit from this possible monster-wave in the precious metals on a large scale? Do you require a service that monitors, controls, analyzes and signals for you all the important moves in gold and silver? If so, go ahead and order just right now the GUNNER24 Gold Trader!

 

 

 

Be prepared!

 

Eduard Altmann