What Happens To Gold And Silver Next? Look Out Below?

Don't look now

AG down about a BUCK

It is interesting that silver has given up the short rally at US$17.50 and today the price is back near to new yearly lows as on 1st Dec 2014 at US$15.50. Silver has lost $2 in two days.

yup spent a lot of time so we could understand the move we see in the silver chart today.

So will the silvers chart continue its move down?

Will silver find new lows in 2015 that are in single numbers?

No trader knows what will happen, at all. I dont profess to have a crystal ball. In markets, no one knows what will happen. No billionaires or millionaires have crystal balls. The banks have no crystal balls, in fact the banks will be the worst at predicting what will happen. Why is this? Because the banks are selling research papers based on their opinions that other firms might make use and by the time its printed, it doesn't mean anything, its old.

However, when dealing with financial markets, making money is not about predicting exact prices, it is not about taking a stand based on ones thoughts or just merely guessing.

For me, my goal is not to predict or front run markets. Along with fellow traders that work desks around the globe, for funds, prop firms, clients, or even trading one's own capital/firm capital our main job is to solely make decisions based on price action, based on various time frames, trends and momentum.

In fact, I dont care what any given asset is, I dont care what someone says at some brokerage house. Give me the price action, followed by volume and I can determine what will happen.

As an example, while markets have been getting volatile over various issues, many of which I have no clue why they are happenig,because I dont pay attention to it, there have been pockets within the market that have been working, even if for short duration trades. As an example, I was busy last week working trades in the biotech sector, trading names such as OTIC, ALDR, AAVL, and a few other non-biotech names such as PRAH, ZAYO.

As a trader, it is not my job to be concerned as to where something is "going". No, rather, I am interested in finding out what are the important points, expressed in price to me, to either enter a position to buy, to sell, or to do nothing. I never assign a price target to any asset, I am not even interested in thinking about how high it could go or low. No, I just look for confirmation to either buy it, sell it, and again, do nothing. From there it is a function of entering the trade, if there is one, and managing the risk in case, despite all the probabilities on my side, that it might/could go against me.

This is how I approach gold and silver, like any other asset I trade. I have access to reams and reams of bank and firm research. None of it I read and one of the first things you learn as a trader is to ignore any and all published reports. Why? Again, its all a function of what is price doing.

So do I care what happens to gold and silver? No. I dont care if it falls, I dont care if it rises. All I care is if I can spot what direction it is going and determining if there is a proper entry point for a trade.

See, trading is not about predicting. Trading is not about being right or wrong. Trading is about being on the right side of the market. Therefore, to me, talk about this "bank says this" and "manipulation manipulation" is nothing but noise. I wish I had a dime for every single time I have heard someone say "but but but but XYZ bank said this stock would be a high flier this year"... and then the stock proceeds to flop and go lower. Reports are useless in financial markets because markets are dynamic and always changing and that is reflected in real time by price.

There are many who refute price action. Those who ignore price action are the ones who end up losing their shirts. No one that puts money into any asset in financial markets can ignore price action. Every single individual, whether they be a fellow trader or retail investor, any of those who thought they could ignore price action, which includes technical analysis, end up being either wiped out or end up with major losses.

There is also a psychological aspect to trading and markets. Humans tend to have strong biases, of which many cannot let go. I always hear fellow traders say "oh this stock has been so good to me".. or they say "oh man X commodity has always been the go to money source". Or I hear "it can't go any higher, its done moving higher" or the classic "its done going lower". I would have billions by now had I gotten money for each time I heard someone say this.

The fact is the vast majority of the retail sector and fellow traders have a hard time letting go of a stock or commodity, to name a few assets, when it is either not in favor or falling. This has disastrous results. I see this over and over and over. I am seeing this with silver and gold on these forums. Look, I see fellow traders that are taking major losses now in high beta names that are not in favor anymore, yet fellow traders, while realizing and KNOWING how to trade, have allowed their emotions to override price action. Not cutting losses short. They should KNOW better but emotions are overriding their ability to listen to price.

Which leads me to another subject. Dollar cost averaging. Dollar cost averaging only works in some assets, not all of them and one needs to understand what asset it is. Let me be very clear- dollar cost averaging of commodities is not done by anyone in the financial markets. Commodities have an entirely different range of investors and metrics, of which the biggest is the simple law of supply and demand.

This is why dollar cost averaging is the kiss of death with commodities. You are not getting paid a dividend to hold it, and you are not looking at any other catalysts to get it going except for demand to ramp up.

I have said this many times and I say it again: If you loved silver at 35, certainly you must have loved it at 30.. and if you saw 25, surely it was a steal,,, and look at it now, if you been buying all the way down in size, certainly you must think you are getting a bargain.

But see, it doesn't work this way. After the 2nd time of averaging down, the human mind starts to have doubts, after all who likes seeing their first entry point being under water? By the 3rd time, someone trying to average in silver is getting doubtful.... but see, again, I seen this behavior all the time,,, dollar cost averaging in a downtrend, especially a commodity, is the kiss of death. I see and have seen it all the time and it NEVER changes. No one can buck a downtrend. This doesn't apply only to commodities, it happens also to anyone attempting dollar cost averaging stocks, bonds or currencies that are declining.



So to wrap it, as someone who is in the thick of this day in and day out, I am not in the forecasting or predicting biz. If did, I would be wrong. However, give me any asset, give me time to watch it, and I will determine if and what trend is developing, if any and I will be in there working trades to see if there money making opportunities. IF not, I will move on to the next asset. After all, I only care to be right by the market.

In order to be right by the market, means paying close attention to price action, which also includes technical analysis. Patterns emerge, repeat over and over and over, there is nothing new, at all. Everything one needs to know about any asset is being told by the price action. Those who choose to ignore price action will and are left will either take larges losses or miss the important turning points that result in major profits.

edit- spelling

Hi Montana.




Price action is going to answer the two questions above!

But for me I am looking to collect a silver coin set and it has a time frame. 1st time I looked at buying this coin set was about two years ago and then read this thread and it stopped me from buying.

Now two years later it looks like the planets are going to a line for me maybe Jan. The money I did not buy my coin set from went into collectible stock. So it works out that the money saved by not buying two years ago is huge.

KG5,

I love the Kookaburra sets. I just started in mid July with this hobby but have bought some of the high relief 2013 (kookaburra, kangaroo, and bear) sets.

What do you think of that new APMEX collection that just started today? I am not sure what to make of it. I think they are selling it for $179 and it is the start of a Biblical series. I might pick it up just to have one from the series.

Its very attractive and appealing. I want it but I need to buy coins for the collection I have instead of one I don't have.

Commodities in general are in over supply (this includes gold and silver) â€" do your own DD

As such most commodities will trend lower. I look at it from a different perspective than YUP, he is looking at price action.
However, when you connect the dots yup and I speak the same damm thing.
Supply drives prices lower.

OT â€" Look at Oil prices - This is classic case of supply and demand for the dense playing out in real time

Ceylon,
Since price is primarily determined by futures contracts (paper gold), and not by the real metal, are you saying that there is an oversupply of paper gold contracts available? My understanding is that these are highly leveraged, with a lot more contracts than metal. If the sellers can come up with the contracts at will, regardless of the actual metal supply, wouldn't that indicate that the supply is somewhat endless? So there would always be an oversupply, price will continue to drop until it reaches zero? I guess I am trying to think through your claim of oversupply and that's where my logic leads me. It makes me think that it may not be a supply and demand issue. Am I missing something in how the supply demand balance works with PM's?