The selling intensifies in gold, silver, and platinum. From the August 12th highs to new recent lows. The selling should continue although a rally in the next day or two would be no surprise. Often there are bounces from oversold conditions which is where the precious metals are now.

We will sell all rallies that reach a level of resistance. As of today, we would look to add to our shorts at 1775 gold, 1950 silver and although we don’t trade platinum the level to sell is 900.

This does not mean we would not buy physical gold, silver, and platinum with capital we won’t need. In fact, this is probably a good time to add a small physical position. Don’t confuse trading with investing; they are separate. The bottom line, for now the precious metals look ugly and like they will get worse.

Precious metals should be owned on a physical basis with capital that is not needed tomorrow or anytime soon. Trading should be done with paper knowing that we can trade either side without emotions.

In all markets price action determines what will happen in the next day, week, or months. Keep the two strategies separate, the worst trade anyone can make is turning a trade into an investment hoping for a way out. Traders must learn to take 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.

Todd Horwitz Chief Strategist
Stop being a prophet and make profits

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