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

just a quick update before the long weekend as markets will be closed tomorrow-

Gold, broke past 1162, hit 1155.80 and bounced. no surprise really, long holiday weekend no one is really going to step on the gas here. On top of that, the pattern is one where the selling is not coming in at the spot where holding the price down would be that sustained.

Silver again testing the 15.45 area, it has bounced here before and it did again, for now. Remember, the more an area in price gets tested, the more its bound to give way.

The more the 15.44ish area gets probed, it will eventually give way if buyers dont step in.

I suspect and I could be totally wrong (as I have no crystal ball and I am NOT in the prediction business, thats not how I make money) we see this lower area tested again in the coming weeks and then see a bounce. However, should it not hold, I will be ready to sell it short and look for lower prices.

What is key going forward is recognizing the pattern as it forms in price. Simply put: we could get plenty of selling that gets us to the point where prices should break however, because of them being stretched, they bounce and we go back into a range.

Being patient and observant will pay off.

boy what a sorry state PMs are in, if anyone is telling you PMs are where you need to be right now, I would be pretty cautious.

Right now, despite all the silly and meaningless Greece talk, PMs are pretty much struggling to keep any gains.

Gold is basically flat and flirting with its low's again, same with silver.

@Domain555

I agree, PMs are just dead money for now. What I observe in both gold and silver is just this boring sideways chop for the time being. They both go from breaking down to almost break downs to bouncing where they should... and then it starts all over again.

Last week there was what appeared a flush and then a bounce happened. Here we are again looking pretty ugly to the downside and yet its holding up.

I sure hope people are not falling for the Ads from all the PM dealers saying "best deals of the year" and "buy now to save yourself from world default" etc etc.

Its very dicey right now, I have seen two scenarios in this type environment-

1- eventually the areas gets probed so much it gives way, in this case, if that happens, gold and silver go lower AND it catches everyone off guard because of these boring sideways chop so the move of importance catches everyone off guard

or...

2- the failure for any sort of follow through on the part of sellers and the buyers eventually prevail.

who knows what happens, there is no way of knowing. I just am watching and observing, looking for clues from the price action.

As far as Greece, I have no idea myself. Seems like this drama will go on until September when it will magically resolve it self lol

PM websites are so bogged down with traffic right now that I can't even connect to them

YUP - you really think we are going to see lower prices than this? What about long term - do you think these prices are the new norm? I read all of your posts and highly value your opinion! thanks!

Awesome info, I appreciate it! Disappointing since I really use silver as my main savings vehicle, but I guess I will just try to put cash aside instead and wait this out and see where we go from here.

Ok lets look together real quick at what has transpired-

Gold





So we have had months and months of chop which has resulted in a wide sloppy range. However, lets focus on the areas of price that are important that give us the biggest clues as to what did happen today and why and where we could go. Remember, charts only tell us the PAST and are not to be used for future predictions. What matters is what the market is actually doing going forward. However, charts can illustrate to us and make it easier for us to follow where price has been at.

First look at the blue arrow to the left of the chart. 1168 was the lower end of the range. That was established on 5/1. Now look to the middle at the green arrow, notice the low of day on 6/15. The low of that day was 1162, breaking the previous low of the range which was 1168, however from there, gold bounced all the way to 1205. But here is here it gets interesting and this is a very common pattern where price gets probed repeatedly.

As gold dropped from the high of 1205, it probed the lower end repeated: 1168, 1168, 1167, 1165, 1166. That 1168 btw is not a typo, twice that was low of day during the week. Notice then how the low end was probed, time and time again to where it finally gave in on 7/2 to 1155 which is marked by the white arrow on the chart.

However, once again, gold bounced from that low the next day. Really no surprise tho, as gold had been down successive days and was due to bounce. HOWEVER, notice what happened today, the sellers pressed again and the end result was gold hitting a low today of 1146. So to summarize things again: gold had been hitting the lower end of the range repeatedly to where it finally gave in. Never forget this- the more an area is probed repeatedly, the more it is bound to give way. This is a tried and true technical pattern that goes back to the earliest of chart patterns.

So now what happens? Well tomorrow it will be interesting to see if the sellers step on it. IF the sellers do that tomorrow we could see yearly lows fast enough and that in turn would bring in fresh yearly lows as the selling momentum gains steam. The other scenario is that we are now seeing gold form yet another range with 1170s on the high end and mid 1140s as the lower end. Again, be patient and watch and see what develops.


Silver




Pretty much the same thing here on silver. The lower end of the range was set on 4/25 with silver hitting a low of 15.55. From there we saw silver bounce higher to 17.77 on 5/18 (which stands as the higher end of the range for now) and from that date forward, silver slowly went lower.


Once again, in the past week, that 15.55 area was probed repeatedly: 15.45, 15.44, 15.50, 15.45, 15.49 to where we got to today. Please refer to the chart where the green arrow is to see what I mean. Again, The lower end of price was probed that it finally gave way, resulting in the low we saw today.

What happens next is the same as with gold. Either the sellers step on the gas and push silver lower tomorrow and we get to yearly lows, which again would increase the selling and could present silver with fresh yearly lows or we again settle into another range.

Again be patient and watch. This breakdown that happened today was significant as it proves again, without a doubt, how strong this downtrend in the PMs is and how the risk of much lower prices in the future remain.

Finally, if you are following at home and are keeping track of whats going on, as of now, the key numbers to watch currently are:

a break of 14.62 in silver can bring in lower prices

and

a break of 1146.80 in gold can bring lower prices.

If you want to follow overnight futures market action and you do not have a futures account, you can use this site: http://finviz.com/futures.ashx Look for the gold and silver tabs.

With the 30+% crash in China stocks, and the 3 hour shut down on the NYSE, I'm supersized we have PMs rather calm.