Pitchfork Playground Newsletter Precious Metals Update

76th Edition, 22 March 2015

Secular Uptrend Pulls Back to Long-Term Support
In an uptrend resistance becomes support. The precious metals are in a secular (15 to 20+ years) uptrend and they are
currently pulling back to long-term support levels.
Thats my story and Im sticking to it!
For you people from Missouri, let me show you what I mean by focusing on monthly charts.
Lets start with Gold itself. Due to its volatility the support level in COMEX Gold is actually a zone as opposed to a cleanly
defined line. Notice how price ran into resistance between $1055 and $1110 back in 2008 / 2009 and then turned that
level into support in late-2009 / early-2010. Now, in 2015, Gold has pulled back almost to the support zone with a low so
far of $1132.
Some analysts are calling for a low of $1030 before the current cyclical bear trend is completely finished. While none of
us want to see a price of $1030 on the yellow metal, notice that $1030 would just be a test of the long-term support
zone.
GC COMEX Gold monthly

The Gold Bugs Index found resistance at the 150 round-number back in 2002 and 2003. In 2004 and 2005 that level
(actually 163 & 165) was tested for support and the test was successful with price tripling over the next three years.
After this massive upleg we got a nearly vertical drop back down to the support level in 2008 where, once again, price
proved that the old resistance level had turned into support.
Rising off support in 2008, price gained over 400% before peaking in 2011 and beginning the cyclical bear market that
we have been enduring for over three years now. Notice that price is back at the long-term support level and the
support level has been tested successfully yet again.
HUI Gold Bugs Index monthly

I wont make you suffer through the play-by-play with Goldcorp.

GG Goldcorp monthly

Kinross Gold provides another example of my premise that resistance turned into support years ago and that support is
now being tested.
If a price pattern can be described as beautiful, that is the adjective I would use here. Notice how the volume in KGC has
risen steadily since 2002. This is one more piece of evidence, in my opinion, that the precious metals and mining stocks
are in a secular uptrend and furthermore, that the uptrend has yet to complete.
KGC Kinross Gold monthly

More of the same in PAAS. Long-term support being tested and rising volume since the beginning of the Golden Bull
Market back in 2001/2001.
PAAS Pan American Silver monthly

This is the only chart we are going to look at that isnt monthly. PZGs daily chart is looking too pretty not to share. Price
has demonstrated that it wants to rally by breaking out of the downward-sloping modified-Schiff pitchfork (red lines)
and the channel formed by the forks upper and lower median lines.
Notice how PZG pulled back recently to test support on the red forks upper median line. That test was successful and
price has risen higher on increasing volume. As if that werent bullish enough, MACD is poised to issue a buy signal and
the MACD histogram is almost back at the zero line. To put even more icing on the cake, we have a clear entry level at
the 200 day moving average (pink line) and a well-defined exit point at the open gap. What more could we ask for?
PZG Paramount Gold and Silver daily

~
Have a fantastic week and enjoy your trading,
Bryan
Editor-in-Chief, Pitchfork Playground

An almost hysterical antagonism toward the gold standard is one issue which unites statists of all persuasions. They
seem to sense that gold and economic freedom are inseparable. ~Alan Greenspan