Gobal Meltdown

At the moment the market players need cash. During a crash, as well the small investors as the major ones use to cover the positions on the fields where they still gain or they have to liquidate panic-struck to avoid margin calls. That spiral keeps spinning until the market is exhausted or the investors are discouraged. Besides the operation "Twist" that came to light on Friday the main reason for the sell-off are the new margin hikes in gold, silver and copper. Seems that as early as on Thursday some knew more already… That decision is supposed to put under considerable pressure all the commodities still on Monday and Tuesday.

On Friday silver slipped into the red on yearly basis, gold has still got a breathing space until 1420 before it would be quoted at the year’s starting price. So, just theoretically there`s a risk for gold to slip under 1400. A little lead on that: If gold falls down to 1100$ – that’s at the latest when you should start to buy physically, for those are the actual production costs…

In the global meltdown when every asset class is going by the board we’ll have to concentrate upon the long-term charts. That’s where we’ll find the most clues when the buyers might think of re-entering into the market at discount prices. And they will – in gold and silver.

At the following support marks you will always have to buy gold and silver physically as well - in order to escape the long-term inflation which is going to last for years. Protect your money buying physical metal at these bargain prices!!

I think that in this downwards move gold wants to head for the Gann Angle support that has been tested umpteen times. It is lying at 1525 for September. It’s not impossible that it will be reached within one or two more crash days. It’s true that on Friday gold produced a low at first at the monthly support diagonal being perfectly supported by the 3rd double arc under the price, but many things are possible during the crashes. The most important support is given by the 1611. A daily or an 8 hour close below would be supposed to facilitate the 1525 rapidly. Gold can’t find its bottom before either diving into the 3rd double arc or at least touching the upper line of the 3rd (1621). At least that would mean a still lower low.

Also the 13 Candle GUNNER24 Up on weekly basis shows us

that the 1525 might become an important target. Last week produced its low at a support Gann Angle. After the break of the 2*1 Angle two weeks ago the 1*1 has always been a possible and allowed target. Markets use to move towards the next important Gann Angle after the break of an important one. In this case it’s the 1*1 angle. The 1*1 divides an up setup into a bullish area (we’ll look for long entries if the market is quoting above the 1*1) and a bearish area (underneath the 1*1 we’ll look for a short entry). We’ll buy since we can make out the same magnet in two important time frames being obliged to assume that the 1*1 will lead to a counter reaction at 1525.

Silver is a disaster for any trader. It’s always been, and it will always be. Most blood and tears and dead have always been to be seen in the silver pits. And it wouldn’t be serious to say where the decline is going to end. In the case of gold I’m pretty positive where we’ll be able to enter without a risk.

But silver may land again in a two digit minus even though gold closes in a plus the same day.

The first buying point for physical silver – and for a speculative long-trade is lying in the area

from 28.50. Silver likes to dip far beneath the important Gann Angles, so I’d say that everything between 28.50 until 27.50 will be the area for a physical purchase. For the very first time the 2*1 will be headed for, so it’s expected to resist at any rate. Because of logic this buying area should perfectly fit with the 1525 gold buying area. There’s the risk that a decline to 19$ would have to follow if the 28.5-27.5 break. But at the moment I don’t see that threat, because it would really mean that gold should be quoted near its production price of 1100$. In the tense currency situation that is actually not possible. – But just in case it is – it would mean the world has become that crude, so we’ll have to exchange house and home for gold and silver.

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Be prepared!

Eduard Altmann