The call for gold to hold support at $1985 Monday was obviously wrong (no one is immune to hindsight), but the level itself wasn’t. $1985 turned into resistance (as traders know prior support naturally does), with support lower at $1965. The breach of $1965 (if $1985 turning to resistance wasn’t enough) was the last sign for traders to exit long positions from the $1935/50 area with profit intact.
Below is a 2-hour chart displaying the breakdown – as well as the anatomy of the run-up leading to the call for the price to fill the space between the yellow lines on the way up.
Silver has been subject to less volatility than gold this week as bulls continue to consolidate for what looks to be an attempt to get back in the yellow box (2-hour chart shown below). Should they succeed in doing so - the move to the top of the box around $24.50 becomes a high probability, in my opinion.
And if bulls should slice through and breakout over $24.50? You know the expression…
All eyes are on FOMC this afternoon – Good luck.
