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

I'd love to see the last few months of gains erased. My stack is still rather modest and I'd like to continue adding to it at rock bottom prices.

Ill be brief here as I can but probably wont be able too lol

Let me first state that it is very hard for traders to articulate to the public, who, understandably, cannot make sense of what markets are doing nor fully grasp the mechanics and constant changes in markets. This is expected and often times the public takes issue with even the mere fact that a trader will change this stance multiple times in a day, week, month or mere hours.

I can certainly understand why and the how skepticism can breed from the result of changing expectations.

Hopefully by now it is impressed upon the readers of this thread that we try to follow the markets by price. This is really the only ultimate true guide, one that no matter how many twists and turns occur, never leads someone off the correct path. We leave our opinions, thoughts and emotions at the door and solely look to price as the guide because it never ever lies. AT the end of the day, in markets, only price is truth.

The current environment is one where price action is the real truth. Trends are expressed and reinforced by price action. As I have repeated many, many, many times, yearly highs equal strong buying. Yearly lows equal strong selling.

My reason for saying the above is that I do believe that while gold is in an uptrend, I do believe, based on price,that we are setting up to see some heavy selling that is going to make one believe that gold is done going higher.

I am making note of this based on what I saw today and is reminiscent of what I have seen based on the past. As traders we draw on thousands of hours of daily observations of patterns, market conditions, price conditions and sentiment.

The first alarm bells going off were the weakness in gold miners compared to gold this week. I have been using the strongest stock, GOLD, as a proxy. This week it has acted as it should, hitting yearly highs and moving higher. However, as the week has progressed, each day, there have been signs of warnings. Many of those have been the fact that it has not been able to close above its b/o. Another sign is how it was lagging as the market was going lower.

The final warning came in the form of a down grade from a financial firm. Without getting into specifics, I ignore these up grades and down grades as they mean nothing for the most part. Now that I said that, let me really throw you for a loop. The ONLY time I do pay attention is when they go opposite of a position that I am in that is going along with price.

Again, I wish I could go on and on about this but it would be long drawn out and would lose its simplicity. But the rule is that when any form of down grade or up grade comes out, the financial firm is doing it at the behest of its clients who are lined up for a push, in the direction, from the financial firms note.

Sometimes the clients want the firm to push the stock up, perhaps the stock is ready to implode lower and the clients have had their fill of seeing their shares go lower so they ask for and out of a place that correlates with price action that dictates the next leg lower is coming. Sometimes the stocks are hitting yearly highs, going higher and another push higher comes in the form of an upgrade and it pushes the stock even higher.

I have been on both sides of these calls. Trying to sell short just it breaks in price, in a proper place and BAM you get stopped out. I have also at times been in a stock, buying it at yearly highs and then an upgrade comes and it pushes the stock higher than anyone thought. So experience has taught me quite a few lessons that have repeated themselves over and over and you never forget them.


This gets me back to the down grade. The proper trade is to be a buyer of gold mining stocks. They are at yearly highs a list that is growing exponentially at yearly highs, a sure true sign of institutional buying. It is FACT that industry groups at 52 week highs are being bought up and go higher.

HOWEVER, the downgrade comes in RIGHT at the moment where buying should start. Usually when I see this happen, the vast majority of time, the stock starts to stall out, the buying dries up, the stock goes lower and goes into a lull.

Therefore, I am advising caution here and just want to be clear that we should not be surprised if we see miners stall out here. We will know more in the coming days, especially if we see a name like GOLD back above its previous week 52 high.


There are a LOT of things going on here in the markets, right now. The market is showing a ton of indecisiveness right now. The volatility is saying that. What the market is struggling with we do not know but there is a tussle between buyers and sellers going on.

So, again, I want to make sure that we all understand that should we see weakness in gold and gold miners, it doesn't mean the trend is done. It probably means the market cannot decide what to do and we will be subject to this volatility.

With that in mind lets talk about gold.

Gold broke, in a short time frame, the HOD from yesterday, so in a shorter time frame, it went higher. However, from about mid morning to the close, it was a steady drip lower. That type reversal should be considered as a warning sign that buying was drying up.

The miners acted the same way. Our proxy, GOLD, did the same thing. The buyers are showing signs of weakness and as discussed earlier, it received a downgrade.

Based on everything I have said, I am thinking probabilities are high gold stalls out soon. Again, I am not saying the trend is done. However in the short term, it is giving all the signs that things are running out of steam.

WE will see in the coming days what comes out of these warnings being expressed to us by price. One thing is for sure I would be remiss if I did not mention and pass on these warnings. Sure, nothing might happen at all and everything I am writing today will look like I was completely wrong.... and thats fine. Markets are like that, you pay heed to the warnings expressed by price and expect to be wrong, thats OK.

On the low end, look to see if the 1222's get broken on gold.

Silver looks like nothing is cooking here. Yet another ugly reversal, even uglier than silver. In fact, silver is sitting on the lower end of the range once again after lifting off of it earlier today. See how things change?

As I had said I believe it was today, has the reason silver has been lagging mean that the move in gold was going to be limited?

In any case, gold remains the leader, gold mining stocks are the leaders. That is where the money has been and is going. A pull back shouldnt be a concern to think the trend is over 1-2-3. Only until gold shows signs that it is ready to reverse it trend can we say the uptrend is showing weakness.

couple of things

Gold- has broken yesterdays LOD, is flat right now but looks like it can turn lower... no higher high over yesterday either

Silver- broke yesterdays LOD, broke the lowern end of the range here, it really looks like silver wants to go much lower from here

our proxy GOLD- there is the impact of the DG on the price action as it is breaking down today. As I said, often when a call comes from a brokerage firm and it is contrary to the price action, it usually signals that someone is positioned in the direction of that call, in this case I am willing to say the short sellers are lined up here for now

GDX- flat on the day but looks like it also wants lower.

There are today several names on the 52 high list, so money still is coming into gold mining stocks. I would say a pull back here, again, doesn't take away from the uptrend in gold and gold mining stocks.

@MontanaCMR

Gold is still in an uptrend, even if it pulls back. It could pull back, retrace back to its original levels where it broke out here and still be an up trend.

I know, its all gibberish to a certain extent. so how can we simplify things

First, one way you can confirm without a doubt we are in uptrend by just waiting for gold to make the next leg up. You could wait and buy until it hits 1264... watch it for the day and buy at the end of the day,,, because then you have your confirmation, without a doubt, expressed in price, that hitting a fresh yearly high reinforces the uptrend status.

The second way, and the one I personally never do but can be done, is buying dips in the uptrend. The question is tho, what dip do you buy? I personally dont like to buy on pull backs, I only like to buy and add on the way up, thats both my insurance that prices are going higher but also it limits how much I put in in case I am wrong.

So I say this, if you want to buy the dip, why dont you wait and see if it comes back first to the lower level of the current range, 1196, once it does, see how it acts at 1196.. does it breach it and go lower or does it hit it, dip and then close at it or above it. IF it cant get back up 1196, that might be signaling lower prices.

Really it comes down to how one emotionally feels about it. What has worked for me, both in making profits or stopping me out if I am wrong is buying at highs and addng at highs and if it backs off from that area and breaches a set stop, I sell and get out.

obviously this is harder to do with physical coins. So I say again:'

either way to above when/if it hits the yearly high that we talked about above

OR

wait for the coming days and see if the lower end of the range gets tested first. if it doesn't, if it bounces and holds from down there, pick some up.

I take it you are not of the Warren Buffet buy and hold school?

Short GOLD, Target 78.30

yup - Your last post is a very clear explanation of why one should buy in an uptrend and I think it avoids the "catching a falling knife" scenario.

Might I suggest though that what is left out is the intent of the buyer in this case. Is it buy and hold for the long (or very long term) or is it to try an make a profit in the shorter term?These questions will also partly determine the best time and how much to buy.

In my case I have been knowingly guilty of buying a falling knife and didn't feel bad about it a my starting position was at a much higher point (2011 - silver at $37 CDN) and my intent is to DCA lower. Now that I have effectively averaged lower and added to my stack I am much more judicious about purchasing. I understand the logic of buying in an uptrend and perhaps that is where we are now but I am now patiently waiting for deals. In an uptrend deals are much harder to find . . .

Dollar cost averaging is a long position. It doesn't require twitchy trend analysis, and it builds savings. Only when you sell is there any concern with price, and relative to the last year right now is a good time to sell. Makes no difference whether you're banking profits or cutting losses.