Gold continues to be under heavy pressure and broke below 1700 on Wednesday. There was an immediate bounce with Gold still closing lower on the day. The trend is bearish showing no signs of new money buyers anytime soon.
Wednesday’s violation of 1700 gold creates a new downside target in April futures of 1650. Although we expect a bounce any day soon, we will look at any such rally as an opportunity to sell more. As we often remind you, markets don’t announce themselves but for now, we see nowhere for gold to go but lower.
Silver is starting to look like Gold, every day the pattern has become worse. Since the panic buy on February 1st, Silver has shown little interest in going higher. Since markets follow the path of least resistance, we are now seeing a move in Silver to 25.00.
Of course, the patterns can change without warning, being long Gold and Silver in the near term is a very risky game. The potential for a much bigger sell off exists, watch the price action. Investors in Gold and Silver close your eyes and ignore the action for now, Gold and Silver will recover, just not today.