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

As we said last night, both those numbers in price from last night broke and lower prices go.

However, as prices continue drop, there will be a counter trend move which will then start a process again of either a new range or a continuation in price continuing to drop.

What is going on with silver? $17/oz now...

Maybe I need to unload my stash...not thinking I'll get what I paid.

I always look at the overall trend in a longer term time frame first. The trend is up, overall and still up despite whats happened lately.

From there, you start to break down the time frames into shorter time frames. We went from price action 3 weeks looking really great to breaking down in a handful of days. Before that, we had a range that broke down and got to where we are at.

However, this has been the overall theme of all markets and asset classes for about 3 years. Its this "oh yea, things are looking gooood" then is "oh my god, get me the heck out of this". Wild, violent swings, in either direction.

Yes, we are breaking down again. If you have money in gold and silver it is something you want to keep an eye on. However, getting into a panic or just saying "yea its done" is not wise. One must allow the element of time to let this play out.


This has been an extremely difficult year for trend following. A lot of great trends have been smashed to bits and left to wallow around and do nothing. If you think gold and silver are the only trends getting smashed, take a look at cotton, sugar, and coffee to just name a few up trends that look like garbage. Take a look at oil. We hit a yearly low in February... and a couple weeks ago hit a yearly HIGH. From there, oil has pull back hard. So again, up trends have been very ugly.

Thats why you need to let time do its thing. If gold and silver are going to roll over and the trend dies, so be it. However, BEFORE that happens, its not wise to just say its done. Allow the move to play out, allow the clues to come together.

So far, with gold and silver, they have been breaking down, followed by a rally, only to falter. As things have been playing out, it reminds me of an uptrend that runs higher, falters, comes down hard, races higher, rolls over, etc.

In fact it reminds me a couple years back with cocoa. It would race to yearly highs, roll over hard, come close to yearly lows, bounce hard and come back close to yearly highs, it was a nonstop roller coaster. I think thats the pattern going forward with gold and silver. In between, we had periods where cocoa just went sideways, showing no signs of life.

This is not the time tho, to be in panic mode. Dont be hasty to draw a conclusion before all the facts have been presented. Allow time to let things play out.

Personally for me, I have no horse in the race, I havent been in gold and silver since I closed out positions in October. I could care less what happens to silver and gold. There are just too many other areas to have capital allocated that are working over gold and silver.

Gold and silver both oversold, so we can expect a bounce up, but wouldn't look for anything substantial in terms of gains, still think that even though the uptrend is still in place, gold and silver prices will go a bit lower from here or go sideways for a couple more weeks. Breaking below $1250/oz. for gold was a short term negative.

NExt points in price of importance for now-

gold- a break of 1211

silver- a break of 16.62

if these areas are breached in the coming days, expect lower prices for gold and silver

should 1211;s not hold, count on 1200s on tap and a possible break past it...

I dont think it would be wise to be making predictions on price levels as far as 1100 and lower, just because, say 1200 breaks.

Seeing that I have done this for a while and its my living, my profession, rule number one is you take level by level and you dont start going far out into the future with predictions.

When I observe people making price point prediction points, they are often wrong. Gold and silver will settle where they settle as determined by the market.