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

And there is the reversal. Talk about a failed break out LOL.. and for, I forget, how many now LOL

This is why last night I was skeptical about the break out happening under the knee jerk movement. It would be much better if we creeped into it, with no fanfare.


Anyways, be patient. Next week gives more clues. For now we have a failed break out. Again, gold and silver need follow through and IF they really can do it, then next week should show us more.

I know just about everyone here is probably like "why did that happen" or "its all rigged". My friends, this sort of price action happens ALL the time in markets, be it stocks, bonds, commodities or currencies.

While I realize everyone is searching for a specific "why" the truth of the matter is the sellers stepped in and sold today. Simple as that. Those sellers originate from the 4 plus year downtrend that gold and silver have come out of.

Seeing that gold and silver have reverted from that 4 year downtrend to making yearly highs last year, price must now "eat" through those various levels, on the way up. Within these levels, sellers are going to appear and sell. An other way of looking at this is "over head supply". Not physical but again, expressed in price. Price, as I always say, has memory.

There are going to be areas that are resistance and it will take a lot of buying to get past them. It will take repeated attempts. As I said, earlier, sellers are going to step in. I think today was a good example of that, sellers stepped in and sold the break out, making a good profit. So the question that remains is- was that it?

I havent been keeping track of the amount of specific break out attempts at these time frames but memory serves me right and looking at previous posts here, we have had multiple attempts to push higher.

Thats a good thing. The more an area is probed, up or down, in price, the more an area is pricked, it will give way. If you have been paying attention, we got to this point today through a series of repeated ranges being formed and broken higher, which have been happening for quite a few weeks now.

Now gold and silver got to a bigger level on a longer time frame and up until today, price action has been constructive. Today tho, it just fizzled out and the close today made for a very lame and pathetic break out attempt. Silver and gold got both smacked right down into their ranges. Silver looks even more pathetic than gold, it didnt even touch 18.54 before it got wailed on.

Now, while today was ugly in terms of price action, we cannot rush out and say "thats all she wrote". We will have to wait until next week for more clues as we might be presented with several scenarios-

1- silver and gold attempt next week to break out again

2- silver and gold simple stay range bound for several more weeks

3- silver and gold start to move lower and break this range lower and start re-tracing their moves from the previous weeks.

What will happen we dont know and its really not worth rushing out to predict what happens. I suspect you will have a ton of people rushing out, pumping their chest saying "see gold and silver are going right back to 10 bucks" or "the game is rigged, we got snuffed by banks". The problem with this sort of useless dribble is it detracts from observing price and being patient, allowing the element of time to work things out.


I know its probably hard for those on here who really love their silver and gold and just are waiting on higher prices. Days like this must take the wind out of your sails. The thing is tho, its important to just take days like this in stride. I would run out of time if I were to start list out all the countless break outs and break downs that are either false or never ever work. Sometimes these break outs and break downs fizzle out and then lo and behold, months later its the same pattern and they do work or they again fizzle out.

So just be patient, let time work things out. Even after today, gold is up YTD 8% and silver YTD 12%, Palladium at 17% (what is it with you people here not buying more Palladium) which I might add, the PMs for now are still beating the SPX (S&P) and the old fart index which is the DJ30 (Dow Jones Industrial). Only the COMPQ (Nasdaq) is close to the PMs at 11%.


I wish I could tell you more but there really isn't much else to say and I am not in the prediction biz. Its best to go with the flow, pay attention to price, it paints a much better picture than my opinion.

quite the price action this AM, nice tussle going on. You can see why its best to just let things play out, see where they settle before making a call.

we have been all over the board this AM.... breaking the range lower, going flat, gaining on the day, etc...

now this is a very nice close and excellent way to break higher, especially liking gold here, (can you see why I been saying for a long time now, buy more gold than silver?)



Silver had a nice move but it would be nice to see it break that 18.54

so just adding some narrative for you people, so you can learn to spot these things in other assets and become better investors in the future...

on an asset attempting to break higher-

1st attempt- fails, reverses,ends at LOD (low of day)

2- next market day, asset drops again, even goes below previous LOD. manages to stay in range however, at the lower end

3- on the 3rd day, asset runs higher and manages to break higher over the previous break out point.

You can see the clear progression of price holding, note the strength, and then charging again into the break out area, this time breaking the previous high and closing out near the HOD.

this sort of price action is exhibiting strength from buyers, in gold. Instead of rolling over this week, gold managed to bounce back again, hit the original break out area and then push higher. This should bring a little bit more push higher and then "ideally" gold should go back into building bases, just chopping around, doing nothing, preserve its gains and then push again higher out of its range.

but the point is, when you are buying assets in markets, whether they be stocks, commodities, currencies, you want to be patient and pay attention to price, its behavior, to paint the picture of whether its a fluke or for real. This same pattern works in reverse when an asset is in a downtrend and weak, and you can use it to either sell short or simply avoid a weak asset.

Hmmm
I think there is more money on the table to come yet

Gold is at 70x price of silver. Doesn't that indicate a buy for silver?