The key levels for gold and silver have failed. The failure through 1850 gold and 22 silver should bring the next level down in play. We remain short but know that 1800 gold and 2100 silver are the next major support levels. Key levels tend to be tested, with the lower trend, we expect see those levels.

The main problem with the current market conditions, lack of volume and general interest. Eventually this pattern will change, however there is no way to know when. The metals are rotating around the mean, breaking slowly to the downside.

There will be no announcement made when the metals find a bottom. As traders we can only let the map created by the charts guide us to the highest probability. Trading takes patience without opinion; metals head south until further notice.

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
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