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Will gold and silver pass or fail?

Commentaries & Views

As expected, gold and silver tumbled hard on Tuesday, taking them down and slightly below their critical levels of support. Both bounced nicely from those key levels and are well above them now. This brings the question, have gold and silver bottomed, or is there more selling to come?

How do we decide if the bottoms have been made or there is more selling to come? We don’t; the trend is lower. Our assumption is that the selling should continue, and Tuesday’s action was predictable based on their patterns. This does not mean the bottoms are not in, but until the trend changes, we remain short.

We know that markets don’t send out announcements or telegrams on what their intentions are; they leave a footprint. The laterally on Tuesday may have been the bottom or another selling opportunity. No one knows the answer; the footprint will guide you to the next move. It is your job to follow.

Precious metals should be owned on a physical basis with capital that is not needed tomorrow or anytime soon. Trading should be done with paper, knowing that we can trade either side without emotions.

In all markets, price action determines what will happen in the next day, week, or month. Keep the two strategies separate. The worst trade anyone can make is turning a trade into an investment hoping for a way out. Traders must learn to take their losses and move on to the next trade.

Patience, discipline, and money management always win the day. Let the map of the markets show you the way.

Join us Saturday, April 2. I will be hosting our Day Traders Dream webinar. The link to register is below.

2022-04-02 Day Trader’s Dream Webinar

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.