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

Just a quick late night note

last week I had mentioned that gold hitting a yearly low was key and that it we would see the selling accelerating. Thats exactly what we are seeing tonight in the overnight futures session.

This is why no one buys commodities in a downtrend and averages down, it is a suckers game and a losing proposition. do not do it. When yearly lows or highs are hit, the momentum accelerates in whatever the given direction is, it always has and always will. IN this case, hitting yearly lows was foreshadowing much lower prices and they are here. Do not get in front of this trend as it is moving like a freight train right now.

Silver has not yet hit its yearly lows. The question remains is silver going to track gold lower? Only the market can answer that. The key number on silver to watch is to see if 14.15 is broken, that would fresh yearly lows and again, the probabilities of the selling accelerating and silver going much lower are real.

Be careful going forward. I hate to say it but everyone who has been buying rolls, tubes and boxes of silver and gold here and there is underwater at the moment, dont be like those individuals. Be patient and just sit and wait, your time will come when you will be able to buy all the silver and gold you heart wants without fretting or having remorse that you should have not bought.

Again, let me repeat: do not buy silver and gold as they go lower in their downtrend, one will not win. Of course, in the end it is your money and one is free to do what one wants to do but wouldnt it better to get more bang out of ones dollars by waiting?


one final thought I forgot to mention- this is a rapid decline, we have basically gold and silver dropping 5 days straight down, not including today. Do not be surprise that we see some sort of big counter trend move or bounce. Again this is normal, the rubber band has gotten stretched in one direction is going to snap back.

This snap back is not signaling the worst is over, rather it just a normal function of price. More later on we should approach this sort of price action.

Overnight lows are holding for today. Of particular interest to me is seeing silver not touching yearly lows.... yet.


What all this means, I have no idea, just watching price action, but generally one metal takes the baton and the other follows so perhaps this signals more selling to come before a respite?

We'll see, remain patient, there is plenty of gold and silver around and they will be getting cheaper so no need to rush out and buy gold or silver.

@punman

the answer to that question can only be answered by the market. To spot and identify this, one must become a student and ardent follower of price action along with accepting that time and patience are important elements that will be needed.


In other words, breaking this downtrend is going to take time and along the way there are going to be many head fakes. One major issue facing the PMs is the amount of overhead supply. I am not talking about physical stocks but rather in the form of price. As prices move, they encounter areas where sellers step in and buyers step in. Obviously, for this downtrend to end, it will take steady consistent buying from buyers to get past these areas where overhead supply will be encountered.

What are we looking for then tho? What does the end of a downtrend look like? FOr one thing, this steady grind lower, hitting yearly lows needs to stop. An asset cannot keep hitting yearly lows and then all of a sudden turn out of its downtrend.

The other factor is breaking key areas of resistance in terms of price and then holding those areas as they develop. We have consistently seen gold and silver give up their counter trend moves, that needs to stop.

Therefore, this is going to take a long time to work itself out. We really cant start talking about how much gold and silver have to rebound until they first stop the slow grind down. There has to be and will be an area in price where they finally stop going down, followed perhaps by again re-test of that area in price but it does not go through it and then a long period of just chopping/basing where finally the move from there is upward.

Again, this sort of thing does not get resolved 1-2-3. It will take time and a LOT of buying. Which is my other point, we will need to see straight up accumulation by institutions who will leave their foot prints via volume on the buy side.

So as an example, looking at gold, as a snap shot, right now, getting over 1232 would be a start. However, this is unrealistic because again, that would be a whole lot of buying which doesn't happen overnight and furthermore, violent counter trend moves are not healthy nor constructive to changing the overall trend.

getting out of the downtrend is going to take time and lots of buying along with repeated attempts by sellers to push the price lower and in these areas, the buyers will have to step up their buying to overwhelm the sellers.


I wish I could give you a shorter answer but there really isn't one. Markets do what they want to and all that takes time.

Thanks yup7676 for the detailed response.

I'm a collector, not a metals trader. However, I think Yup's price action analysis is finally getting through to me. I currently have zero interest in buying anything for the foreseeable future.

Well the cost of silver on the silvers chart is AU$19.93 per oz.

When this thread started the AU$ was at US$1.10 not now!

Gold re-testing its lows of the week... if this area keeps getting probed, it will given in again and lower the price of gold will go.

Silver, it is interesting that it hasnt hit a yearly low yet, despite the fact that gold already is touching yearly lows.

Is the price action in silver saying-

a- both PMs have more to go down and gold is leading...

b- since silver hasnt hit a yearly low yet does that imply that gold is soon to rebound...

c- or does simply mean this time around we dont have a correlation?

I have no idea but those are important points to observe in the price action going forward and only the market has the answer.

I am looking forward to lower prices as I would like to buy a kilo somalian elephant coin eventually. But we will see. I just cant buy one tho knowing prices are dropping and dropping.