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

^ Trade as in short or long?

Uh oh yup, we're almost at 15.90 just before the bell wit all pms positive. Today should be fun

Ya crazy huh, I might just have to buy a little more today

Markets are about context and time frames.

We remain in, a longer time frame, in a downtrend. Within this time frame, it can be broken down into shorter time frames which can make profits in either direction for traders. Long time followers of this thread have probably noticed how over the years we have been discussing this downtrend, there have been moments where gold and silver have broken higher and then just as it looks like the move was holding up, it breaks down.

I work in time frame which looks for breaks of trend lines of a specific pattern. This specific pattern has key areas of price action that I am looking for that I know work for my time frame.

In the case of silver, breaking 15.90 was key and a good start. Now what remains is-

A.- where does it close today. Always remember this, the old saying of "its how they open but how they close".

B- Suppose silver closes above 15.90 for the session. Will there be follow through buying tomorrow?

C- While this is a good pattern at a key break in price, there has been a lot of buying going on to get to this area, does it hold up? It could but not the way I like to see price get to the important area or point.

As always, there are zero guarantees in the market.

About to place a put order...

Intersting stuff today. I wonder how metals will perform tomorrow with the Dow finally closing above 17k on a 5 day streak

Silver breaking out today out of its range. After 15.90 was the battle ground break out area last week, silver is making a move higher after about a week of range bound trade.

Gold is also breaking out today as well. Unlike last week where silver was leading, gold and silver are rising in tandem. Gold broke out over 1169 and is higher today.

Again, how far this goes who knows. On a shorter time frame, this is a short term trade buy for traders. In an overall longer time frame, gold and silver remain in downtrends. There will be plenty of over head supply in terms of price that will be roadblocks for gold and silver to break the down trend.

That said, sometimes a break of a downtrend begins this way. This is why observation is so key because we are always looking to see if the trend is changing, if it is, continued sustained buying will be present and levels will be taken out, one by time.

FINALLY,,, while gold and silver are making their break outs this month, its interesting to note as an observation that we have seen other commodities attempting break outs as well such as palladium, sugar and others trying from lower bases such as coffee and cotton.

Much has transpired in gold and silver since the end of September and going into October, in fact gold really started heating up in October. Lets take look at what has happened with the price in action in the past several months and were we sit now.

As always, we approach the charts as only a reflection of price in the past, charts do NOT predict the future. In fact, we are not interested in trying to predict where things go, we let the market decide that part. What we should and do concern ourselves with is what evidence is price giving us that some trend is either still in place or changing. Being patient and following the trend is where the real money can be made AND is always made, everything else is just noise such as trying to predict if silver or gold are going to "X" price. Let the fools waste their time with that.

Gold




In the chart above I have kept our annotations from the previous set of charts we used. First off, since October 2nd, gold has been on a tear, running higher, putting a continued series of higher highs and higher lows which is indicative of steady buying. Remember how at 1169 (look at green arrow pointing down) on 8/24 gold stalled? That area finally gave way on 10/14 as gold broke out higher. From there it continued higher until it pulled back.

That brings us to where we stand now. What we have now is a new range (look at price between the two aqua lines). It should be no surprise if we see if a pull back in the course of this move. Notice several times gold stalled before attempting this run higher. This fairly common especially how much overhead supply that has to be absorbed by buyers in this downtrend.

For this recent price action to be constructive it would be preferable to see gold just trade range bound, in other words let it form another base in price for a while and then make another move higher, building on its original break out from 1169. 1169 by the way is a key number going forward as this an important area in price where gold broke out higher from. Look to see if that number is breached on the way down in the coming weeks.




Silver



Silver was running higher last week and breaking out before gold break out. Remember we discussed 15.90 as the break out area last week. After breaking from 15.90 silver went on a wild violent range but still managed to get back into 15.90 and higher. Again take a look at the upper two aqua lines where the green arrow is pointing towards the right end of the chart. There we can see the range that is currently being developed.

As with gold, it would be constructive for higher prices if silver just spent time bouncing around in a range before attempting to break higher. This would make the break out higher more credible, as a break from a longer base makes them more durable and lasting. This also applies for a break lower but in the context we are referring to it is for a break higher, building on the previous weeks move higher for silver.


Finally, remember- there are no guarantees that this break out holds in gold and silver. We have witnessed countless times vicious counter trends moves that have fizzled out. For that reason we take the price action level by level. IF this is a real attempt by gold and silver to finally break out of this downtrend we will see levels that build, then are broken higher and hold. Eventually this will lead to gold and silver making yearly highs and then for sure we have confirmation via price that gold and silver are officially in a strong uptrend.

To get there we need that element I always repeat- TIME. For now, expect wild volatility and watch how deep the pull backs and how fast price recoups from these dips. In time, the market will show its hand, all we have to watch for are the clues.