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Metals: Technical damage not a reversal in trend

Kitco Commentaries | Opinions, Ideas and Markets Talk

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

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I wrote Monday that, in my opinion, dips in metals were likely a buying opportunity until such time as technical damage occurred. As a regular reader soon after commented, "Technical damage is done."

The below 4-hour charts of gold and silver (updated from Monday) show the breakdown, which immediately led to some downside follow-through.

Note how the breakdown in the price for both metals was retested to the upside yesterday intraday – but failed – leading into this morning's increased selling. The bottom of the yellow highlighted boxes are where I believe prices may find support, as participants price in the now almost guaranteed 25bp overnight rate hike coming in May.

Traders should be looking for signs of a bottom prior to re-entering on the long side while considering the greater trend is still up; therefore, signals could manifest suddenly and as early as over the next few trading days.

Thanks and good luck!

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.