New day, more economic data and still gold and silver can’t find buyers to support them. We often hear that precious metals are being manipulated and pushed down; However, there isn’t enough volume and interest with buyers sitting on the sidelines.
Price action is always the determining factor in the markets. Until proven otherwise, the action is ugly and signals that the sellers are in control. With PPI this morning, selling could be much heavier which we expect. We are short and don’t see enough buyers to reverse the trend.
With gold and silver hovering around key levels, the next push down could be uncomfortable. Gold could see 1800 and silver below 21 depending on this morning’s PPI. This is speculation of course, but the price action and data we have suggests that the selling pressure has room to the downside.
Given the pressure in many markets, poor economic data and other factors, we expect a bear market rally to cover short positions. With Gold and Silver getting pounded on the PPI number this morning, we’re looking for a spot for a short-term trade to play for a rebound before selling again.
Precious metals should be owned on a physical basis with capital that will not be needed tomorrow or in the foreseeable future. Trading should be done on paper as we know we can trade both sides without emotions.
In all markets, price action determines what will happen over the next day, week or month. Keep the two strategies separate. The worst trade you can make is turning a trade into an investment in hopes of a way out. Traders need to learn to accept their losses and move on to the next trade.
Patience, discipline, and money management always win the day. Let the map of the markets show you the way.
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