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Gold, silver price favoring bulls – How to press a winning trade

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Monday morning, I suggested an opportunity for a long trade in metals with a first target of $23.80 silver and $1930 gold. Spot silver hit $23.78 overnight, while gold has thus far stalled at $1905. It seems to me that the secondary target of $24.20 in silver would manifest if gold bulls can get over $1905 for the extra $25 up to $1930. Traders who entered silver can (perhaps should have already) decide whether they are happy with long side scalp.

The 2-hour chart below shows the gold price breaking out of the downward channel in effect since the late July top at $1985. The yellow box represents the $1930ish target

With the gold/silver ratio looking deeply oversold on the same timeframe, perhaps the way to press this metals trade is to take the money on silver and add to the gold position, especially if you're sitting on a $10 or $15 cushion on the gold.

I would continue to stay extra vigilant trading this market into Friday. That said, the turn in the gold-to-silver ratio has me thinking this swing trade may morph into a longer-term positional trade, one level at a time.

Thanks, and have a nice day.

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.