$1,280 -- Here We Come
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The struggles for gold continue, as commercials are short the metal in record numbers. Interestingly enough, their short position in silver has never been this small. The commercials arenâ€™t always right, but itâ€™s hard to fight them because of the amount of capital they have at their disposal.
Gold remains weak and every rally is met by sellers, with gold making lower highs and lower lows, indicating the next big move is lower. Resistance appears to be $1,316 to $1,320, while support comes in at $1,300 and then $1,280. The strength in the dollar is a contributing factor in the pressure on gold, but there is more to the story and $1,280 is in play.
On the other hand, silver looks to be at a support level and is headed for $17. The gold-silver ratio is stretched once again, trading at 81. Expectations are for the ratio to fall below 70, making the short-gold, long-silver trade attractive.