…The world is drowning in debt created by the central bankers and force-fed to states like a goose being fattened for foie gras…Always, always follow the money…and, as always, the best defense against the global uncertainty are gold and silver holdings…[and here's what the charts have to say about the current performance of gold and silver].

By Michael Noonan (EdgeTraderPlus.com)

Gold – Weekly Chart

We have been looking at the 1395 area as a potential stopping point for the current rally that has been underway for the past few months.  Last week was a smaller range, but the close was near the high so there is no evidence that sellers are overtaking buyers for at least a correction.

Gold – Daily Chart

…There was an early intra-day spike lower on Friday, but the market recovered to negate the early selling effort.  For now, gold appears to be poised to continue its current rally.  That may change on Monday or later in the week or even a week later.  The point is, until a correction begins, let the market prove it by price and volume activity.

Silver – Weekly Chart

There has been a clear change in market behavior for silver, and it is to the upside as the rally from May to present shows on the chart. There is really nothing about this chart that addresses a reason not to be long the paper futures.

Silver – Daily Chart

Friday's attempt to take the price down failed very quickly as evidenced by the quick recovery that extended for the balance of the trading session.  Last Tuesday's spike high needs to be watched for potential resistance, but even Friday's intra day sell-off was a weak reaction overall, on the daily chart.

Gold:Silver Ratio

Silver continues to gain relative to gold, as we have been saying, and expectations are for the gold:silver ratio to favor silver.  Where it was 84:1 a few months back, last week the ratio reached 68:1  Expectations are for 40:1 to as low as 15:1 possible.  When, and if, that occurs, it will then be time to switch at least a portion of one's silver for gold. Playing the  ratio at extremes is a great way to increase one's physical holdings without having to sell. There are transaction costs, to be sure, but the net gain makes it worthwhile.