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Metals: Time to buy the dip, again?

Jonathan Da Silva

Kitco Commentaries | Opinions, Ideas and Markets Talk

Featuring views and opinions written by market professionals, not staff journalists.

Commentaries & Views

Last I wrote, I speculated that another leg down in the metals following the initial selloff of this much-anticipated retracement would not surprise; that was on Tuesday last week.

Since then, both gold and silver have gone on to print lower lows, with gold spot reaching $1852 and silver $21.80. Gold did not breach the 50-day MA as I suggested it may as a serious fear-inducing drop; instead, the price is finding support at the 50 MA, following the breakdown of the clear bear flag.

Daily chart: Supported at 50 MA - oversold daily Stochastic RSI

3 hour gold chart: Textbook breakdown from bearish flag

The question is whether the uptrend is ready to immediately resume, or if the pullback is to extend slightly farther down. With my trader hat on – I continue to be wary of more selling in the very short term if looking for a chance to pick as close a low as possible. Physical stackers might have less to think about with price in correction mode and premiums on bullion investment products down over the past few months.

Thanks and have a great week,

By Jonathan Da Silva

Contributing to kitco.com

Contact jdasilva@kitco.com
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.