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Buy Silver, Sell Gold?

Commentaries & Views

As traders come back from the long weekend, there is some pressure on the metals. Is it time to buy silver and sell gold? The answer is not easy but there are a few facts that could favor that trade.

Speculators appear to be buying silver, which tells us the bottoms could be in or near. The pattern itself looks lousy but if silver can hold the $14 to $14.35 level, that could be the case. The expansion of the gold /silver ratio to 89-1 is another sign of the market trying to reverse. If silver is going to rally, it will probably come from a short squeeze, which could be created because the speculators are buying.

Gold continues in a lethargic downtrend and is headed for $1,240 unless something major shifts the pattern. Gold continues to make lower highs, and new resistance is at $1,290. Until proven wrong, the play in gold is to sell rallies that reach resistance, which is $1,290-$1,300.

The answer to buy silver and sell gold is not easy but would probably work. However, from a straight technical look, the metals should be headed lower until further notice.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.