Gold and silver had a nice bounce from support on Wednesday and now are pushing resistance. What will happen from here? The highest probability is that resistance holds and Gold will be headed back to 1800, Silver to 21.
Obviously, there are no guarantees of failure. However, using the current footprint that the metals are leaving, the probabilities are high on failure. The price action has been weak, buying has been light and the strong hands are still the sellers.
Gold and silver are not a hedge against your equity portfolio, they are hard asset commodities that everyone should have in their portfolio. At best, gold and silver are a hedge against the fraudulent fiat currency system. However, the trend is lower and we will sell until that changes.
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 BubbaTrading.com
Stop being a prophet and make profits
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