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

nothing to say really... just a boring range bound market for now.

As an example, notice how silver keeps going back to 15.90, the area where it broke out. For now we keep bumping around that area.

As this range continues to develop, we will see in time which way it breaks out of it, either up or down and that will give us good clues where we are headed to from there.

@pocket change 50

For now yes, sitting out and being patient will pay. Why?

For starters, lets just talk silver for a bit. The last few weeks we talked here about a range that was going on, choppy sideways action.

In time, this choppy action put silver at a breakout area of 15.90 ( a look back in the thread you can see that area discussed and what to expect). Silver came into 15.90, broke over it and that area in price turned into a sort of battle ground that gave us a lot of chop and sideways action again.

When silver broke over 15.90, it had some follow through to it. However, after a few days, it fell back and into yet another range of choppy sideways action. However, the key number, 15.90 remained as a battle ground and prices continued to close around that area during this sideways chop we have seen in the past week.

Today, silver broke again above this current range, breaking above the previous high end of the range which was 16.19, today it has hit as high as 16.36.

Thus far, the price action has been constructive, silver is trying to carve out some sort of floor here. The more we get of this type of sideways chop, move out higher, hold gains, chop/sideways, move out higher, etc.. this sort of same repeated price action to the upside and prices will with time eventually break this downtrend.

So again, the price action is constructive so far. There will be overhead resistance in terms of supply which will lead to more pull backs. How silver deals with these pull backs is key, it tells us how much in control the buyers are.

We arent out of the woods but there are signs as evidenced by the price action that silver is attempting a move higher here and trying to hold on to its gains. Many times we have seen this before and then it fizzles out but we must balance that with that fact that perhaps this time these moves hold.

Yup, which US and/or Canadian mining stocks are looking attractive right now?

looks like back into the range we go.

Take a look at silver... look where it closed at. 15.94 Lets see if/how deep this next move is. Does the all the buying from previous weeks fizzle out?

same with gold, a new range has formed, we are now at lower end. Once again, lets see if/how deep this next pull back is. Again, does all the previous weeks buying fizzle out here?

Quite frankly, this is really nothing new. One has to remember there is a LOT of overhead resistance (in terms of price) above. Gold and silver will spend time cutting or trying to cut threw it.

Allow the element of time to help paint the picture. Allow price to do its thing.

Gold and silver getting smacked hard. We have our key areas in price marked out. Look to see if those previous break out areas are regained or do silver and gold continue to break lower.

Just a few observations-

We went from a counter trend move that was vicious and broke some key areas in price, or trend lines as they are called, even showing some follow through, or continuation,, only to fizzle out in a few days later and start yet another leg down.

As we have discussed often here in this thread, we have seen quite a few of these moves play out in the downtrend and they are normal and should be expected.

The other thing I Wanted to point out is many times you have the talking heads and financial media talk about the made up terms "over bought" and "over sold". Many times after an asset is say down, 5 days in a row, someone on the financial media will say "but you know, we are due a bounce here because we are oversold here greatly".

Again, I have discussed this before but I will repeat myself as we have an excellent example here with gold and silver. No one but the market can determine the true value and where an asset heads in price. There is NO such thing as either over bought or over sold, these are incorrect terms. As an example, look at silver. With today, it has been down 10 days in a row. Some would have started to say after 5 days in a row down that silver was "over sold". Again, that would be wrong to say that because it is only the market that can decide that, not an individual.

Finally, the key numbers going forward to watch are"

Silver -13.91
Gold- 1072.30

Why are these key numbers? These are the yearly lows, the "52 week lows". When a 52 week low or high is breached, price tends to accelerate in the direction of the trend. This case we are seeing gold and silver in downtrends, so breaching the yearly lows would, as it always does, accelerate the push for even lower silver and gold prices than we have seen.

Finally, there can be without any doubt, as demonstrated by the price action at yearly lows, that gold and silver remain firmly fixed in a strong downtrend.

As always, exercise caution and manage your risk. These are not times nor areas to be buying gold and silver.

how bad are silver and gold doing- even with this mayhem in Paris they cannot get any traction....