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

update-

wow 5 days down in a row,,, gotta say I was looking for a bounce of some sort. instead more selling,, and that leaves no doubt in my mind sellers are in control here.

Silver, getting a big move down also, same situation here.

At this pace, I can see gold and silver first test their yearly lows and then we'll see if the sellers can press for even more lower prices.

Dont attempt buying this dip unless you dont mind seeing your purchases underwater. IF you must buy, wait until this selling is over first.

@tripncoins

Yea you could do that, depending on your time frame, for a trade stand point, you could also look at buying some calls.

IF I was going to do a trade via options, I would choose one that would be the simplest- I would be a buyer of puts on SLV and GLD as they crossed their 52 lows. Why?

You have ample liquidity, define your risk, and by purchasing at the break of 52 yearly lows, you get your confirmation on the trade.

Thats one way to do it, now theres various set ups, depending again on your time frame.

However, let me say this: The initial set ups for selling short and taking advantage of the decline in silver and gold were last week. I wouldnt try to start any new positions yet.

I initiated a short position in gold via the leveraged ETF GLL on Tues of last week when it broke 90.19 I think, considering the pattern, that there will be some sort of reversal here, I dont think it its a straight shot down. IF it is, I think we perhaps are finally getting some big move down in both silver and gold.

In anycase, if decide to use puts, use leveraged ETFs, or sell short SLV or GLD, just be mindful of whats happened this past week. When you enter a trade you want to give yourself the proper timing and cushion to allow the trade to play out.

Had I known folks would be interested in using the markets to sell short gold and silver in this decline, I would have offered up several easy to use set ups that I use all the time.

@tripncoins

Just looking at the price action for this past week, there are two scenarios I am looking for-

1- continued slow drip down for silver and gold into next week.

2- A bounce for both silver and gold, followed by yet another range, sideways price action.

If we get a bounce and sideways action, and it drops lower, I think there's where one can reload and sell short again. However, I'd say, after 5 days in a row down for gold, I tend to lean that we get a bounce, but of course the market will decide that. All I can do is plan around what the market decides to do.

another thing interesting is, who's leading who? Is gold following silver? Or is silver following gold? I mean with silver we are roughly 40ish cents away from testing yearly lows.... that gives in, we are going to see much lower prices, since we will be setting new fresh 52 lows, which in turn lead to more 52 lows.

to give a good probability to work for lower prices this is what I want to see:

A minor bounce in silver and gold, chop/sideway action which sets up for more lower prices as it nears and re-tests the yearly lows. That gives us a cushion and stops this constant retracements we have seen. That also would allow to either add to start a line short in silver and gold.

Who knows tho. I can only make a plan for the scenarios I see and then execute.

What is clear tho, is the constant probing of the yearly lows is NOT a sign of a strong asset. Rather, it means its going to give in.

Its been very comical to see many folks everywhere exasperated in a sense with gold and silver, saying "we are not going anywhere, we been in this same spot". Well guess what, that is all part of this process, which gets worked out by the element of time. Each time we bounce and retrace, we are setting up important points that will be referenced later.

As an example- with silver, the key dates are: 6/26, 6/27 and 7/1 of 2013,,, those areas held up for silver. Now silver is coming in there again.... those are the yearly lows... I would be hard pressed to say that the 4th time and it holds,,, I cant remember seeing assets getting probed like that in an area of price and holding up, whether up or down in price lol.

That probing in price is what put us where we are at today, take a look what happened this week.. we go back to 12/31/13, 5/1/14, 5/5/14, 5/29/14 and then finally it gave way on 5/30.

This is a very simple, constant principle in trading: the more an area is probed, either up or down, sooner or later it gives in. Its funny to see people who are NOT paying attention say "oh we been here before, whats the big deal".

Anyways, you know Trip, another area to look into is selling short the silver and gold miners that havent fallen prey to the weakness, you could also sell short there or buy puts.

So there you have it.. lets see what happens this week I have trailing stops moved up in case we get a bounce Monday.

lol@northern

well, I could see prices rise in the short term here, would be no surprise to even see it bounce this week, but not anything where it breaks the strong downtrend they are in.

Here is something else to consider. The LONGER silver and gold contend with these ranges and grind around and sideways, for them to go higher,,,, they will have to cut into all these ranges, so a scenario where prices "skyrocket" isn't possible.

One thing many arent talking about after is the strong possibility that once the downtrend stops, its possible gold and silver do absolutely nothing for a long time.

@northerncoins

I understand what you are saying. Sure, I think if you can buy right silver and gold, you could rip it for a profit or have something solid and physical. But if it does nothing, to me personally, doesn't mean much, I wont hold an asset that isn't trending and doesn't pay me while I wait either.

To me, I would rather sit in some high yielding dividend paying stocks.

That said, I love staring at some of these older issue RCM coins that I bought on the cheap as gold and silver slid lol. I am eyeballing other stuff too....

I have to laugh here... because its really looking like we are going for yet another bounce or retracement here and and sideways action lol

tho we made a lower low overnight from the Friday close, there wasnt much push to break it lower.

any day now I expect some sort of bounce, if it doesn't happen I would be surprised lol

well.. looks liek gold is getting follow through today from yesterday.

Its finding support in these areas and since we did not break down with authority last week, I wouldn't be surprised to see us trade again in a range, this time gold going for the higher and and then proceeding to chop and go sideways.

I dont expect to see lower prices for now tho, just more range bound trade.

Notice that the European price did not budge on the ECB; just us thickheaded Americans! Can you say "knee jerk"?