Gold and silver fail at resistance - That's bullish
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Monday, we wrote that the key levels to watch for gold and silver were $2,000 and $26.5. Both failed miserably at those levels and sold off. The selling continues this morning as they now head towards support levels.
Although many will complain about the banks selling again, but the facts are simple: Monday’s failure was bullish. When building a trend, the ebb and flows of markets are to make higher highs and higher lows in an uptrend. Lower highs and lower lows are made in a downtrend.
Monday’s failure should prove to be bullish for gold and silver. The next big points to watch are support at $1,960 for gold and $25.5 for silver. We expect both to test support or near that area. The next move up may fail again or breakout to the upside. That story has not been told yet.
The bottom line: the trends are higher, which should take gold to new highs and silver to $27.5 – $28. Obviously, they can go much higher if and when they break above those resistance levels. In the meantime, expect the markets to consolidate between support and resistance.
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.
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