How ugly will it get for gold and silver
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
How bad could it get for gold and silver? No one knows the answer to this question; however, if it does get ugly, we can expect to go down farther than we think. There is no way to determine how high or low any commodity can go; we only know that low prices cure low prices as high prices cure high prices.
As we look at the charts and technical, the patterns are ugly and an extended sell-off could occur. With asset classes like gold and silver, our assumption is eventually, they will go much higher. The gyrations and nonsense are a part of trading and investing, testing the emotional imbalance of all.
We are short the futures as a trade and are long physical as an investment. We are never selling or trading our physical and can take the pressure of a massive sell-off, which would be our preference to capitalize on both. We are always willing to add to our physical position but would love to benefit from our trade.
Saying all that, we can’t predict the future and can only look at one level at a time. Gold’s first bounce should come between here and 1750 based on August futures. A breakdown below 1750 brings 1725 into play. Silver should bounce from 25.5 based on September Futures. A violation of 25.5 brings 25 into play.
Although we can’t see the future the trend is lower and there could be some extensive selling. There is always the chance the trend could change and we could reverse. That’s the risk in trading.
Patience, discipline, and money management always win the day.
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