The key levels for gold and silver have failed. The failure through $1,850 gold and $22 silver should bring the next level down in play. We remain short but know that the next major support levels are $1,800 gold and $21.00 silver. Key levels tend to be tested; with the lower trend, we expect to see those levels.
The main problem with the current market conditions is a lack of volume and general interest. Eventually, this pattern will change; however, there is no way to know when. The metals are rotating around the mean, breaking slowly to the downside.
There will be no announcement made when the metals find a bottom. As traders, we can only let the map created by the charts guide us to the highest probability. Trading takes patience without opinion; the metals are headed south until further notice.
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 we can trade either side without emotions.
In all markets, price action determines what will happen in the next day, week, or month. 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.
Join us June 13 for the Monday Night Strategy Call at 4:30 EST
