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September 08, 2010 4:19:24 PM PST

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J&M Coin & Jewellery Ltd.
127 East Broadway
Vancouver, BC, V5T 1W1, Canada
Tel: (604) 876-7181
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Articles and Commentary

Commodities in Final Stages of Basing - Gold and Silver
By Chris Vermeulen
October 9, 2009

Charts courtesy stockcharts.com.

Commodities have and continue to be a fantastic trading vehicle for those who can stomach volatility. After last year's market crash most commodities pulled back to normal if not lower than normal trading ranges.

If we look at the weekly charts for gold and silver we can see that commodities in general look ready to skyrocket higher approximately 34% on average in the next 4-12 months.

Take a looks at this chart of gold. While this chart shows the basic technical analysis of the price of gold you can see the completion of the Cup & Handle pattern which is VERY BULLISH. Also you can see gold broke to a new high. While I don't like to trade new highs it's hard not to want to buy into this breakout. Most traders should be long gold already, but if you are not, you have a couple of options. Buy into this breakout with a tight stop or wait for a pullback and buy on a test of the breakout. Personally I am waiting for a pullback (test of breakout) before I add more to my position.


Silver has been strong but has not held up its value as well as its big sister (gold). As you can see silver must break through two more major resistance levels before making a new multi-year high. Overall silver still looks strong and I will be waiting for a low risk setup for us to add more to our positions.


Conclusion:
Overall, commodities look like a great buy. We are seeing precious metals moving up strongly and gold making a new high, which is very exciting as our golden rock stock plays push higher and our commodity ETF play continue higher as well.

We continue to stay in the market and are waiting for another round of low risk setups which could happen in the next few days if we get favorable price action. Remember to move your stops up to lock in gains. There is nothing worse than giving back a large portion of your profits when you don’t need to.

If you would like to receive my free weekly trading reports, please visit my website at www.TheGoldAndOilGuy.com.


TheGoldAndOilGuy.com is owned and run by me (Chris Vermeulen), an individual gold trading specialist. After sharing my gold analysis with friends, traders and financial advisors, I decided to make TheGoldAndOilGuy.com my full time job in 2003. This service was designed from the ground up to help individual traders who want to focus on consistent, accurate and profitable trades. Over the past ten years my strategy has been refined to one golden trading vehicle which has an almost 100% accuracy. The GLD (DGP and DZZ) gold exchange traded funds are now the most accurate trading vehicle I have seen, so it's my vehicle of choice. Members of TheGoldAndOilGuy.com not only get to trade my signals, but see my live trading charts and ask me all the questions they wish. My goal is for all of us to make money and have fun in life.


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