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

Let's first discuss gold and see what we have seen happen and what is going on forward. First chart shows where we are at right now.



1255 is the upper end of the range that was broke several weeks back. We saw a nice move with follow through from the 1255 area that pushed all the way to 1307. However, we discussed in the past several probabilities as gold pushed higher- The points were:

1- a pull back, how deep would it be...

2- either in price or time, (looks like its happened by price) and thirdly,

3- overhead supply.

This overhead supply is important and key. Why? The overhead supply I am referring to is not physical but rather in relation to price. These are areas where sellers have sold in the past and where selling occurs as well as areas where buyers step in and buy.

This back and forth of moving higher and lower in price is completely normal, it is to be expected. Remember, price has memory. IT always has and will be there.

Therefore, we should not be surprised to see that after moving higher, gold ran into selling pressure. It is also common for an asset that has broken out to re-test areas as it pulls back in price. Many times an asset will re-test where it broke out of. The first level was the upper range, 1255. Clearly that did not hold and it sliced right through it.

Now remember how we talk about "support turns into resistance" and "resistance turns into support"? This a typical staple of trading, where again, thanks to price having memory,sellers and buyers step in. As an asset moves through these levels, they move both ways. In the case of gold right now, here will be very well defined areas that will hold.

At this stage as gold drops, it will come into areas that will become support. We have lost 1255 on the upper end, and as 1255 was lost, gold plunged lower. Think of whats happening as a sort of "price discovery". Gold is probing around levels until buyers step in. So what do we have to work with this week?

To see what we have now, we will use the Friday close as the lower end of our range. This range is temporary for now as we do not know if prices will hold here. The range we will work with on the lower end therefore is 1228, the Friday LOD. Again, that is only temporary as we do not know yet if that holds.

However, it should not be any surprise at ALL that it stopped here on Friday. 1228 in face has been a lower end of a range in the past. Again, price has memory.... so this should be no shocker. Take a look at this 6 month chart where we see a range from months before, notice its presence between the dark blue line and aqua blue line.





Until 1307 is broken, gold does not move higher. As of this post, our focus this week is to see what level gold bounces off of with 1228 being a temporary lower end. A break of 1228 will bring lower prices. Simple as that.

Finally, until we breach the 12/1 overnight futures market low in gold, I am of the opinion that gold still has a chance to move out of its downtrend. There have been key moves that are typical of a "down but not out" asset that is attempting to change its trend..... and without a doubt, breaking a trend, in either direction takes time and multiple attempts.




Looking at silver and its really the same thing as gold. The clear upper range is 18.50 We had seen silver break out of 17.35 several weeks ago and its been given up. To me, 16.70 for now continues to be the lower end of the range. For this week the focus should be to see if this lower end holds, on the upper end, clearly silver is not moving higher until 18.50 is broken.

As always be patient and observe price. The market doesn't care about my opinion or yours it is going to do what it wants to do. Its going to do what it wants to and the only thing that maters is the price action, nothing more nothing less.

Yesterday found gold and silver breaking their previous LOD. The end result? Much lower prices today.

For the time being, gold and silver are in a pattern of lower highs and lower lows which is resulting in a steady drop in price.

AT this stage, as discussed Monday, gold and silver are in a discovery phase, probing lower until they find support.

Until the lower highs and lower lows stop, prices will keep dropping.

Yet another day with both gold and silver breaking their previous LOD. This type pattern just feeds itself in the short term for lower prices.

on Silver, I am looking to see what happens at 16.55, whether that holds or gives in. The more it is tested, the more likely that it gives in...

Been many days since we have seen gold and silver put in higher highs and higher lows and today is that day. Should make for an interesting Monday to see if this pattern continues or will gold and silver continue to slip.

whats interesting to note is silver, despite the move down, all it really did was test the lower end of its range and didnt break down out of the range as gold did.

The question becomes then, as we have seen in the past, is silver going to lead gold higher? We dont know that but as always, the market will give us the answer by price action.

charts this weekend.

pretty big gap down for gold and silver here.

Notice we talked yesterday that breaking the LOD on Friday for gold and silver and lower prices would be here. That is exactly what happened today.

For the time being, gold and silver will be probing for areas of support but they will go lower as the market determines the next move and what area of support kicks in.

Also remember, there is a lot of overhead supply in terms of price where sellers step in. A 3 year downtrend remains present and its making itself manifest as of late.


The chart structure continues to get very sloppy with the price action in gold and silver.

Its been a week of selling pressure for both gold and silver this week.

Silver dropped about a bit over a dollar and gold almost 30 dollars. Is pretty clear that silver and gold are falling into a lower range for next week.

I'll do some charts over the weekend and we'll see what levels are coming up next.

Gold and silver have both been breaking level after level this whole week. A lot of progress that was made on the buy side has been erased.

First let me say this- a re-test of a break out levels in terms of price do happen and are normal. However, they dont appear in assets that are high fliers. Clearly, gold and silver are in this no mans land. One major reason is the amount of overhead supply. These levels in price are acting as resistance for prices to go higher. This is normal. Furthermore, working out of a trend, whether upward or downward, is hard.

First up lets look at gold.




A whole week of straight down with level after level taken out. The clue to this: gold, day after day, would break its previous day low. Remember, a series of lower highs, lower lows almost always guarantees low prices. For this to stop, one needs to see higher highs, higher lows over the previous day and it needs to be in an almost continuous form.

So for now what one should be looking for is at what level does gold bounce from. Also key here is the December 1st overnight lows. Should that not hold, new lower yearly lows should be considered a high probability.

Take a look at the chart. 1307 remains the upper range and needs to be broken for higher prices to materialize. We can see that the range was broken, starting with 1228 which we were using as a temporary low end of the range.

If you look to the far left, where the blue arrow is pointing down, you can see that there is a range here. The question is: does gold bounce from anywhere here? That is what we are looking for next week, where does gold stop going lower.. or does it continue to grind lower next week with no bounce?



Silver is in the same shape as gold. Key break out areas were given up in the previous week. Not even the low ends of the range worked. For the week, we saw again, this same pattern of lower highs and lower lows, indicative of much lower prices that would emerge and they did. As with gold, the question remains, where does silver bounce, if at all?

Perhaps we see 15.30s give us a temporary low but that remains to be seen. Thats one target area but not guaranteed. Therefore with Silver, pay attention to if and where silver catches a bounce. That December 1st overnight low for silver is also key. Should that not hold, the probability of lower prices are increased. For now, we can see a range developing down here as well, notice again the blue arrow on the chart to the far left. There should be some sort of bounce.


So to wrap it up, there is really no reason to be involved in gold and silver unless you are working on a very short term time frame. There will be traders looking to play a short term bottom to trade off of. Outside of that, there are no reasons to be buying gold or silver.

This is a very tedious, choppy, messy market. To me, the focal point is how close do we get to those December 1st overnight future lows and if they hold.

As I always repeat, being patient and letting time work things out is key here. One cannot go ahead and make wild predictions. The market is going to decide what it wants to do when it wants too. All we have to do is watch and be patient. The market will tell us what happens in its due time.