Gold and silver could get ugly
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Markets are constantly bringing new challenges, or so it appears. The bottom line: the patterns continue to repeat from different levels. At the end of the day, all charts are the same, patterns repeat, and all big moves must start in the shortest time frame.
Gold and silver are no different; today, the patterns look ugly, bringing $1,800 in play for gold and $21 for silver. Obviously, that pattern can change, but until further notice, the trend is lower. The correct side of the trading market is short. Miners have been getting crushed, which are all bearish signs.
We expect to see a rally in the next day or two, which will be a selling opportunity for traders. The price action does not affect physical holdings because we aren’t trading inventory. We trade paper. You must always keep in mind the end goal of the trade or the investment.
We remind you that the action is bearish. We are short and willing to sell more. You can make a case for either side, but the trend is currently lower. Gold has a new range and a key level to watch. The range is $1,800 – $1,900 and the critical level to watch is $1,850.
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.