Last I wrote, I speculated that another leg down in the metals following the initial selloff of this much-anticipated retracement would not surprise; that was on Tuesday last week.
Since then, both gold and silver have gone on to print lower lows, with gold spot reaching $1852 and silver $21.80. Gold did not breach the 50-day MA as I suggested it may as a serious fear-inducing drop; instead, the price is finding support at the 50 MA, following the breakdown of the clear bear flag.
Daily chart: Supported at 50 MA - oversold daily Stochastic RSI
3 hour gold chart: Textbook breakdown from bearish flag
The question is whether the uptrend is ready to immediately resume, or if the pullback is to extend slightly farther down. With my trader hat on – I continue to be wary of more selling in the very short term if looking for a chance to pick as close a low as possible. Physical stackers might have less to think about with price in correction mode and premiums on bullion investment products down over the past few months.
Thanks and have a great week,
