Gold, silver reaching support
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
On Tuesday, gold and silver were under pressure as the equity markets continued to make new highs. The metals were under pressure all day and all rally attempts were met with sellers. The pressure on these markets continues to build.
Gold and silver have come to the moment of truth as they reach their major support levels. The patterns alone suggest that gold should bounce, and silver should fail. We are expecting a dead-cat bounce in silver, which should be a quick pop followed by a drop. Gold should bounce and then continue to the upside.
This pattern is common is all markets; silver is in a downtrend descending lower. We expect silver to trade down to the $17 level. Gold should test the $1,560 level before resuming its rally to test $1,600. Ultimately, we are looking for gold to test the Jan. 8 highs and silver to test the $17 low. Gold is based on the April futures, and silver is based on the March futures.