opinion

Metals: Technical damage not a reversal in trend

Kitco Media
By Jonathan Da Silva
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I wrote Monday that, in my opinion, dips in metals were likely a buying opportunity until such time as technical damage occurred. As a regular reader soon after commented, "Technical damage is done."

The below 4-hour charts of gold and silver (updated from Monday) show the breakdown, which immediately led to some downside follow-through.

Note how the breakdown in the price for both metals was retested to the upside yesterday intraday – but failed – leading into this morning's increased selling. The bottom of the yellow highlighted boxes are where I believe prices may find support, as participants price in the now almost guaranteed 25bp overnight rate hike coming in May.

Traders should be looking for signs of a bottom prior to re-entering on the long side while considering the greater trend is still up; therefore, signals could manifest suddenly and as early as over the next few trading days.

Thanks and good luck!

Kitco Media

Jonathan Da Silva

Jonathan Da Silva developed a passion for hard money and economics from a young age having been influenced by family who sought to teach me that "nothing is free", and the importance of intrinsic value early on. My interest in markets grew keener during the great financial crisis of 2008; leaning on family with vast trading experience, I began to self-educate on technical analysis and economics- drawing inspiration from the works of individuals like W.D. Gann and Adam Smith. I have been a proud member of the Kitco team since 2017 and hope that my writing inspires readers to consider an objective view of the metals, and the greater financial markets.

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