Email of the day (3)
Comment of the Day

March 25 2011

Commentary by David Fuller

Email of the day (3)

On the technical question of gaps:
"Technical question on gaps

"I notice gold neatly filled its gap at $1419 yesterday [Tuesday] whereas silver did not fill its gap at $35.45

"Do you think that silver needs to fill this gap before it progresses further or is silver's relative strength so strong as indicated by the collapsing gold/silver ratio that it does not need to?

"Is April traditionally a strong month for gold?

David Fuller's view I am not a fan of gap analysis, not least as most in commodities are due to either low volume or a lack of 24-hour coverage. Since gold and silver futures are traded around the clock, Fullermoney's trading day commences with Asia, then Europe and concludes with USA trading. This includes after-hour trading.

For more on gaps, please use the 'Search' facility listed in the menu shown upper-left, fourth item down. You will find 37 prior entries, many of which will deal with gaps on charts.

I think silver will remain the strongest precious metal until demand is temporarily exhausted, at which point it will suddenly become the weakest in its sector. Therefore I would not trade it without a trailing stop.

Bullish seasonality for precious metals can extend into 2Q but I would not count on it. Meanwhile, gold's medium-term uptrend remains consistent but the next USD rally or stock market setback would provide a headwind.

Back to top