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Looks like a rough period for gold and silver

Commentaries & Views

Gold and silver look like they are headed for a rough period. Looking back, they were down for the 2nd week in a row. Neither has seen a positive week in the last nine. We have been watching gold and silver consolidate, and now they are breaking down.

Silver looks worse than gold, with it breaking through major support this morning. Friday’s action was a warning sign for gold and silver, a big rally early followed by failure. Gold did close higher Friday while silver was lower, but both were ugly.

We must remember that trading paper metals is a short-term play for more active traders and has nothing to do with physical holdings. We have been short gold and silver since April 25th, gold at 1907 and silver at 23.61. We will remain short until the price action suggests a turn in trend.

Too many try to pick tops and bottoms when the footprint and price action is a much better view to the next move. There appears to be more trouble coming in all markets; eventually, gold and silver will turn around, but there is no percentage in being early.

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 me Monday, May 2 at 4:30 EST for our Monday Night Strategy Call. The link to register is below.

2022-05-02 Monday Night Strategy Call

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.