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Torn between two Levels - Gold and Silver consolidate

Commentaries & Views

Gold, silver and platinum are all in similar patterns, all in a downtrend, all consolidating between two levels and all looking to breakdown. We have been short since mid-August and now look for the next big move to the downside.

Since all markets are the same and all trade in geometrical patterns, the key is identifying the pattern they are in. The pattern and our algorithm are short, indicating a downtrend. The phases that markets trade are congestion, breakout and blow off. Looking at gold, silver and platinum, we can see a clear downtrend pausing in consolidation. This tells us that the metals are ready for another big move, which we expect to be lower because of the general downtrend.

The levels we are watching now are December gold: support at $1,875, resistance at $1,950, December silver: support at $23.5, resistance at $25 and January platinum: support $840, resistance $900. Until one side or the other is violated, this pattern will continue, eventually breakout in either direction. Based on what we can identify now, the next big move will be lower.

Many times, we have written about different markets and expectations. Once a trend has been identified, expectations are for the to exist until it does not. If you remember, a trading decision should never be made on anything subjective; decisions must always be made on facts of the chart patterns. Those decisions won’t always be correct, but the probabilities are in your favor to trade based on those patterns.

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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.