Gold has broken below spot $1990, and the support line I presented last week; the same daily chart is shown below. A breach of the 50-day moving average and test of the upward solid trendline in the $1930 area now seems the most likely scenario in my opinion; caution is warranted. I think bulls would need to take the price over $2020 on a weekly close for a chance at a breakout to new all-time highs; such an occurrence over the short term (by the end of next week, for example) would be notable.
For traders - an opportunity on the short side maybe manifesting. Should the price retrace up and fail (at around $2010/20 again), that may be the entry point. Of course, traders can decide whether they think downward momentum will immediately accelerate and engage based on their own risk parameters.
The picture for silver isn’t any more encouraging; weekly chart shown below. Last week I wrote that a bounce at the $23.80 level was likely, and we got it. Unfortunately, as of now, it does seem like that was nothing more than a bounce with lower lows underway. The signal for traders looking to short silver may be an upward retrace to $24.50 and failure to follow through higher. Like with gold – a close above this key level this week or next would be notable.
Thanks and good luck,
