Trading the Fear & Greed Gold Price Parameters

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Determining the ups 'n downs of the precious metals has been an adventure to nowhere for all of us. Understanding the algorithms of the banksters has been a futile exercise without a whistleblower. We know they concentrate their heavy paper trade dumps between 7AM -11AM when the LBMA is active. Certainly no one dumps 50,000+ contracts at the slowest time of the daily trading in hopes of a profit! Physical spot prices are derived from paper trading, this we know. There will always be speculators, independents and hedgers in there. In a normal free market trading without manipulation and price suppressions that would be wonderful. But, that's not the way it is.

So, let's take a glimpse of the extreme divergences of the Gold price from its WEEKLY 50-week Mov. Avg. Quite simple actually; a chart a neophyte can comprehend.

The "Fear" (capitulation) extreme was in late 2008 when gold's price went 17% below its 50wma.  Gold had never dipped below its WMA since that occasion...ever. I suppose a technician could draw a support line beneath -1%, -6%, and -5%. But, that's not the intention of this presentation. The "Greed" (enthusiasm) peaks have been 28%, 11% and 7% since 2011.

We have tried to represent the emotional reactions of buyers/sellers in graphic form as to what human actions may be in the crystal ball for the future.

We don't know. But factor in all your fundamentals along with more paper confetti money from the Fed, and go from there.

Naturally, where gold goeth, silver followeth.
click image for larger view You are free to create your own free charts from Netdania.