Charts

Lots to talk about today but it's late, so, all you get are charts.

I've had a very busy morning. I had intended to write a bunch of stuff about silver demand but that's going to have to wait until tomorrow. Besides, the charts need your attention as Feb13 gold option expiration and First Notice Day is right around the corner and we need to stay alert.

So let's look at gold. First of all, you can clearly see on the daily and weekly charts that it is working itself into a corner. Normally, this would be fine as it might be just as apt to break out and UP than out and down.

However, option expiration for the Feb13 is next Monday, the 28th. Following closely behind, First Notice Day for delivery is next Wednesday, the 30th. As per usual, we must expect some Cartel shenanigans as they try to shake price and rattle/dissuade prospective "deliverees". Then throw this log on the fire...the daily chart with RSI. Note that the battle against 1700 resistance has sapped some of gold's momentum and the RSI (a measure of momentum) is actually turning lower, below the levels last seen in late November.

All of this means that the next 3-5 trading days in gold will likely hold more weakness than strength. All of us stackers should be looking to buy a dip that could take prices down to the $1660-1670 level. Paper traders, especially those with Feb13 contracts should be wary.

Though weakness in gold always spills over into the silver pit, the situation there doesn't look nearly as tenuous. Both the daily and weekly charts show plenty of wiggle room for silver to move without violating any of the current trends.

And the silver chart with RSI looks OK for now, too. The RSI has climbed significantly...that's what seven, consecutive UP days will do for you...but it's still trending higher and is not yet to the late November levels. At any rate, I like silver here and I might be looking to buy some March or May calls if weakness spills over from selling in gold.