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Gold, silver correcting - buy the Labor Day dip?

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

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As I write on this Labor Day Monday, silver is now 4% off last week's $25 high, with the price back at $24 right now, as gold is 0.5% off its $1950 high of last week, currently trading at $1940.

The Daily gold chart:

If you made the flip from silver to gold at $24.20 (when I first suggested it) or higher, then you are still in a nicely profitable trade and have likely preserved your mental capital, which may come in handy for the flip from gold back into silver.

The daily silver chart below:

I'm not sure the time to flip into silver is now, and I still believe (as I have suggested since I initially spotted this trade opportunity) that one should be nimble in this market and be ready to be in and out (and vice versa) at the drop of a dime if trying to put on trades.

A look at the gold/silver ratio shows that it has found support as metals have run into resistance.

Prudent traders, in fact, would not be wrong to take profit altogether, in my opinion. It seems very plausible to me that the ratio will find its way back to the top of the range denoted by the yellow rectangle, which will pressure metals further.

Yet another opportunity to add to physical stacks at lower prices looks to be on the horizon.

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.