On Tuesday Gold dipped below 1700 June futures and managed to close near the highs of the day. This morning Gold was slightly higher and once again a large seller showed up again taking Gold down about 10.00 on almost 4,000 contracts. This is the same action we have seen 7 of the last 9 days, a big seller dumps into an illiquid market.
The good news for Gold is it managed to hold major support the bad news is the pattern is not great and could breakdown. We are staying long as we have been for the last couple of months. Our proprietary algorithm has us locked in with big profits, but until that changes, we remain bullish on Gold.
Silver recovered nicely on Tuesday after being lower early, closing higher on the day. This morning Silver is at resistance, 15.40 July futures. If Silver can manage to breakout to the upside from here, we expect a run back to 16.00, however failure at this level could reverse the pattern and turn lower. In other words, Silver is in consolidation and preparing for a big move.
As we remain bullish Gold, Silver, and Platinum, they are all in very tenuous patterns and on the brink of breaking out in either direction. A case can be made for the bulls and the bears, only one side can win but the torture of consolidation can continue for an extended period. There is no way of knowing when the breakout will come or the direction.
Todd Horwitz Chief Strategist BubbaTrading.com
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