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Silver breaks down gold, platinum hold support

Commentaries & Views

Monday was quite the day for gold, silver and platinum. All three had broken down below support. What looked like a massacre turned out to be a silver breakdown with gold and platinum, holding support with a late-day rally.

Silver saw the biggest amount of damage on Monday, breaking down below support. Today it has opened significantly lower prices from here. This morning, silver is seeing a minor rally, but certainly not one big enough to reverse the breakdown. The silver price action now brings $22-$23 in play as the next significant level for silver to hold.

When gold started to sell off Monday and quickly accelerated, it appeared as if gold could be down over $100 an ounce. However, the major level of 1900 held after spending much time below. New support and resistance levels for gold are 1950 resistance 1875 support, based on December futures.

We remain short gold, silver, and platinum, looking for the downtrend to continue. For now, we do not see a reversal to the long side coming anytime soon. Expect selling to accelerate. However, remember that in significant downtrends. There are monster rallies that make you second guess your position. As long as our algorithm stays short, we will remain short.

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