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

Gains for silver will not stick. I for one hope we see price action as we did in 2006-07. Then I am buying a little house made of silver.

I will start by saying-

Price has memory. Simple concept that we traders know to be true. 1255 should ring a bell if you have been following closely here... because 1255 is where gold settled at.

I Also want to point out how I had mentioned repeatedly one of the scenarios that was possible was a re-test of a b/o.. we say this re-test at 1255 of the upper end of the range.

As it stands now, gold now should start trading between 1255 on the lower end and 1307 on the lower end.

Do you see also how, on a shorter time frame, gold started to make lower highs and lower lows each day?

Silver is exactlty the same thing. A new range has been formed. The break out from 1/16 has essentially been given up.

All of this is to be expected. Price has memory. We have also discussed that there will be sellers in front of silver and gold as price rose.

Silver now should trade between 18.50 on the upper range and 16.70ish on the lower end.

If these ranges are broken on the low end, lower prices are coming. PRetty simple stuff.

Absolutely nothing has changed either, its always the same thing. take level by level, and now we know silver and gold have and will for the time being correct by price.

Allow yourself to be guided by price and not by what you think it should be.

ok lets dive right into what we have-

We have discussed here that we would see a pull back and that it would be completely normal. Why? As we have repeated over and over, there is plenty of overhead supply in relation to price. Simply put, there will be areas that sellers will show up and sell. This is normal as we know that price has memory. Many times these areas where selling shows up is called "resistance".

Gold and silver are facing that right now and will keep running into various levels of resistance. Whats key is tho that "resistance turns into support". In the case of gold, 1255 is a perfect exact of that. Gold early last week broke 1255 and now it has turned into support. How do we know this? Take a look a the chart. Repeatedly gold has touched 1255 and bounced and stopped at that price. It is for now supporting 1255.





Take a look at the chart and we see our new range. Low end for now is 1255ish and the high end 1307. Pretty simple stuff. With that said, for higher prices going forward, one wants to see 1307 broken. To the downside 1255 breaks and lower prices are coming. Again very simple.



Silver has also formed a new range since its initial break out. 16.70ish has turned into the lower end of the range and the upper end is 18.50ish. Just as we discussed with gold, silver ran into resistance and now previous resistance has turned into support for now. This type of price action is very common and happens ALL the time in all sorts of traded assets, whether they be commodities, currencies, stocks or bonds.

Keep your eye on the upper range, breaking 18.50ish should give higher prices, a break of the lower end of the range of 16.70ish and the probability for lower prices increases. Again, very very very simple.

One final thing to note is pay attention to how fast or not gold and silver recuperate. IF we get a sharp return in a short period of time to the upper range then clearly dip buyers are starting to show up. Also, the more that gold and silver push out of this range and hold, the faster they are moving out of the downtrend.

remain patient, pay attention to price as it will lead the way and as the saying goes, price never lies.

Silver was up mid morning $17.70 or so then all but pretty much fizzled back down to $17.20,wow. I still want a few pounds of silver this month any how.

Still in a choppy range bound market.

1255 on the lower end continues to hold for gold. Today gold made a higher high but also made a lower low, we are going no where for now in gold.

Silver also remains range bound and choppy. It made a lower high and lower low today. Let's see if this is the start of much lower prices in silver where it ends up breaking the lower range.

Again, price action is what guides me, what guides everyone. Leave your opinions at the table as the market doesn't care what I or you think.

If 16.74 doesn't hold on the low end of the range for silver, lower prices are coming.

Despite this chop, staying away from the December 1st low for both gold and silver are key for me. If we lose that, I'd say much lower prices are coming.

The final thought I have is that both gold and silver are very reflective right now of overall market conditions in the US. A lot of volatile times are behind us and ahead. The market will eventually come to a resolution. Usually any sort of volatility marks in a given asset is not normal AND indicates a lot of indecision in the markets.

We will get a resolution, and right now, patience is key and to remain vigilant as to what is going on.

@allspice

not a problem at all, glad to be of help and even better that it makes sense... really its very simple to see what, where and why.. when you look at price action over various time frames.

HOD = High Of Day

LOD - Low Of Day

sorry about that, didnt think of that when I used that. Whats key about HOD and LOD and when we compare it to day to day action is that it can set a pattern. So as an example, an asset say a stock or commodity does breaks the previous day HOD today and the LOD is also higher, well that repeated action can tell us the buyers are stepping up, perhaps a certain area in price has a lot of support. This also works in the opposite and prices decline and make lower lows and lower highs.

So by watching those movements we can detect weakness or strength and recognize areas of support or weakness. By being observant we can pick up on clues.

... and yes patience is very key in the markets right now. The chop and sideways action is making countless traders sit out unless they trade volatility or have in edge in it. In this kind of environment even intra-day traders can be chopped up.

Eventually this chop is going to break and we will get an idea what happens next.

Well we got our break and its pretty obvious as well, 1255 on gold, gave it up and 16.74 on silver.

below there are various levels of support which we'll find out soon enough what works.

more later

@MontanaCMR,I will buy up to 21 or as low as silver will go,which mostly will be in 2006-07 price action. I will as well buy up but I have to see a super strong trend which I would say for sure is not around the corner for us stackers. Working with a average is good,as long as its your extra fiat then it does not matter if its silver or boxes of bubble gum,I would rather have stacks of silver myself.

@yup7676,"what works"low prices works. Silver is getting dumped this month pretty bad all ready. I think we will see more weak price action for silver with little or no movement up that will stick this month of Feb 2015. This year is already giving stackers some slack to buy more for lower prices then last year,its a good thing.