How Will Precious Metals Perform In The Long Term?
EDITOR'S NOTE: Here is a fun technical analysis article discussing precious metals long term prospects. For those of you who follow Investor Business Daily, you’re likely familiar with the “Cup & Handle” chart pattern. A cup forms when gradual selling is followed by gradual buying. The cup forms a base from which bullish movement may be anticipated. The handle is the interesting part. It means that the market didn’t agree with the sellers’ thesis as strongly as it had during the cup phase. It can also mean that bulls were buying into the selling, minimizing the price declines. Overall, this is a bullish signal. And it’s exactly what we’re seeing in gold and silver on the monthly chart. Because it’s happening on the monthly chart, a bullish completion of this chart pattern is likely to take months, making it a longer-term prospect. The explanations are below. You decide for yourself whether it's a thesis you agree with or not.
Each investor has to be aware of what their time frame is. Are we looking at the coming days, weeks, months, or years?
Some are traders, and some are more active than others.
Timeframes are particularly important right now for precious metals, especially over the long term.
Today, we look at long-term monthly charts for gold, silver, and copper. As you can see, similar-looking patterns are developing for each. Cup with handle for Gold and Silver and a strong base cup for Copper.
Again, these are very long-term charts. Clearly, the near term has seen some selling and consolidation in Gold and Silver’s “handle” phase. So those are biding their time and will become very bullish when they reassert their up-trend.
Copper is testing its highs from a decade ago at (1). If Doc Copper would succeed in breaking out, its next Fibonacci extension level is a good percentage above resistance.
The long-term setup is looking good here. Watch to see if Gold and Silver can reassert their up-trends by breaking out of the intermediate consolidation. And let’s see if Copper can breakout to new highs.
Originally posted on Investing.com.
