Over the past few days, we had concerns that Gold and Silver were getting close to reversing. However, it is apparent that they both failed at the key level to reverse and now look headed back down. This is the reason that we only react on closing prices.
Although there are still some positive signs that could change the pattern, as of today Gold and Silver are headed lower. They are close enough to make a change but until they do, we will keep our short positions and now possibly add to them over the next couple of days.
We know that the Gold bugs are calling us nuts but of course when trading mechanically nothing else matters. We expect the selling to continue and possibly accelerate to the downside until this pattern changes.
Investors should stay long and ignore the signals; traders should be short. Those with opinions or those that need to reason why Gold and Silver are shorts at this time will always struggle when the metals are negative. Trading mechanically is simple for those who can ignore the surrounding news and opinions of others.