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Gold and silver fail at resistance

Commentaries & Views

There are many reasons why gold and silver should rally from here and only one reason that they shouldn’t. On Thursday the metals were spiking higher before failing at resistance levels. Right after 10:00am EDT the ISM services number came out and like the manufacturing number was a miss sending the metals screaming higher.

As the news was digested markets suddenly started to reverse. The DOW was down almost 300 before spiking and closing higher on the day. At the same time Gold traded as high as 1525 before closing at 1514, below the 1520 resistance level. The recent dead cat bounce in Gold should be over and the lower trend should continue.

The reasons given for the rally are low interest rates, global economy meltdown, dollar uncertainty and a few other fears. However, at the end of the day markets always revert to the technicals and in the case of the metals they are in a downtrend. As long as Gold stays below 1520 and Silver below 18.50 we are sellers.

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.