We have been writing for weeks that Gold and Silver were at key levels of support. These levels were must hold or they would get flushed and sure enough on Monday, they both failed and dropped big. Gold fell almost 40.00 and Silver almost 1.00.
This morning the selling continues with Gold down an additional 28.00 and silver .40. Once again both have come to another decision point. The levels are: Gold 1800 December futures and 23.00 December Silver. A violation of those levels could create the same action with a hard fast sell off.
Obviously, we are still holding our short positions and assume those levels will be violated. However, after this morning’s early push down to 1803 Gold and 23.08 Silver, a dead cat bounce would not be a surprise. We expect a small bounce but will add to our shorts at 23.5 Silver and 1840 Gold.
The next major targets we are looking for are: Gold 1750 and 22.5 Silver. The trend is lower and there is no expectation that the bottoms are in. We expect the selling to continue and sell offs to be hard and fast.