Friday, I suggested metal bulls still have the power, and for gold, the evidence of that is yet another higher high made overnight. Yesterday morning gold produced a false breakdown (shown on the 2-hour chart below) of the rising uptrend line shown on Friday as well. But prices promptly recovered to resume their uptrend trend; this can be taken as a bullish sign.
Silver bulls, however, were subjected to an outsized and aggressive bout of selling yesterday morning, as the metal left all prior medium-term correlations in the dust, as if it were lifted and transposed out of the existing market to trade in a vacuum; experienced silver traders and investors have no doubt seen this movie before; which tends to roll as a Sunday evening special or Monday morning matinee, the most opportune moment. The below 4-hour chart of silver shows the price breaking down from the box shown on Friday; I thought $22.55 was in range on the breakdown, but sellers couldn’t get the price under $22.75 before the dip was bought (I have covered buying dips multiple times on this run).
I am seeing a lot of speculation about how this setup (breakdown and recovery) in silver is extremely bullish. And while I believe that metals bulls still have the power (as titled on Friday), I would like to see Ag close over $23.90 spot this week to confirm a complete reversal of yesterday morning’s indiscriminate selling - and another run at $24.50, this time.
Thanks and have a nice day,
