Gold and Silver attempted to breakout of consolidation on Wednesday and failed. Around 9:40 EDT Gold, Silver and Platinum started to run higher and looked like they would break to the upside. By day end Gold and Silver were on their lows of the day.
This once again proves that the trend is your friend which increases your probability of making money trading. As we have clearly warned, there are no guarantees that we will be right on the next move, however knowing the win rate helps you manage your trades.
For now, consolidation is the pattern, and the current trend is lower. This will keep us sellers, probably with a more aggressive attitude. Wednesday’s failure indicates there is more underlying weakness.
Although Wednesday showed a spike rally early, but the failure tells us we should be sellers at 1800 August Gold and 26.5 September Silver. We believe that precious metals will go higher in the future but under the current pattern selling or observing are the only two choices.
Patience, discipline, and money management always win the day.
Todd Horwitz Chief Strategist BubbaTrading.com
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