Gold and silver fail at resistance
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
After Wednesday and Thursday’s rally in the metals, both gold and silver have failed at resistance. This action was expected, gold and silver remain in downtrends. Expectations for the metals is to test the lows made on Tuesday.
The two-day rally was not a bullish sign but simply a dead cat bounce from extremely oversold conditions. When markets get overextended it’s natural to see a temporary reversal. This happens in every market, usually 2-3 standard deviation moves will usually reverse before resuming the trend.
It is our view that the downtrend will resume, and new lows will be made. The key here is the $1,440 level, if that fails $1,420 and $1,400 come into play. Gold and silver have done nothing to initiate a change in direction. We stay short until further notice.