As we sit with our short positions in Gold and Silver both have now reached a key resistance level. On Wednesday, Gold reached major resistance, failed, and then came all the way back to make new highs on the day. This type of action could lead to a reversal to the long side.
Gold would reverse to the long side on a close over 1900 April futures today at the close. The levels change everyday but when short they can only come down. Today’s 1900 could be tomorrow’s 1895 depending on today’s action.
Silver is in a similar position with a close over 26.20 March futures. Today will go a long way determining the next big move. Until proven other wise we are short and will stay there. However, we will be less aggressive in adding based on the current price action.
We know that markets never announce their intentions which is why the price action is the most important part of managing positions. Although we remain short, Gold and Silver we are still long, while Platinum looks ready to make new near term highs. Patience, discipline and caution are the words of the day.