Is the top in? Maybe not

Silver is swooning badly but at $39.70 is important support. It just tested it.

There are several indications that the top for gold and silver is not yet in. The first is that gold has held up pretty well. Gold is basing around $1530 and a likely timeframe says that the current correction could end today.

The second sign is that the dollar has been bouncing around 73 but it looks like it could drop from here. The Euro just began a push toward 1.50, which should be an important target and resistance area. This would be roughly the 71 area on the Dollar Index, which is near the all-time low in March 08.

In fact, there is a small chance that the Euro will power through 1.50 toward 1.60, which would cause gold and silver to blast off. But that is not so likely. Instead, the dollar will likely bounce from that level and there will be a decent correction in the precious metals.

We just might get a spike in gold to $1600, as early as this Friday or mid next week. Timing cycles point to May 12 as a top. Based on silver’s weakness this week and last, it does seem that the coming top will be significant, and silver could drop pretty far from current levels. But there may be a pretty decent bounce first.

This entry was posted on 04/05/2011 at 04:03 pm and is filed under Gold, Dollar Collapse. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.

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