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Gold at resistance, silver at support

Commentaries & Views

It's amazing how similar or correlated products cab really trade in opposite directions. Gold and silver are doing just that. Although they look similar in the charts, silver is in an uptrend as gold remains in a downtrend. This morning both are lower.

As a trader, I would consider spreading the two, long silver, short gold. However, gold does look better and is a solid rally away from joining silver in an uptrend. It is interesting how much trouble gold has had trying to breakout to the upside.

Here is the place you make the key decision, are you trading metals or investing? If you are trading, you should not be long gold; however, if you are investing, this is probably a spot to add on. This is a decision that is based on money. If you can hold and not panic, buy the physical metal.

Just remember to define your trading and investing plan when deciding how to play the next move. There is no doubt an explosion higher in metals is coming. The bigger question is from where. Remember, gold and silver will be there. There is no shame in waiting for an uptrend to buy.

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 months. 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.

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.