Monday was quite wild for gold, silver, and platinum, all three had broken down below support. What look like a massacre turned out to be a breakdown in silver with gold and platinum holding support with a late day rally.
Silver had the most amount of damage done on Monday, breaking down below support, opening significantly lower prices from here. This morning, silver is seeing the minor rally, though certainly not one big enough to reverse the breakdown. The silver price action now brings $22-$23 in play as the next major level for silver to hold.
On Monday, when gold started to sell off and quickly accelerated it appeared as if gold could be down over $100 an ounce. However, the major level of 1900 held after spending much time below. New support and resistance levels for gold are 1950 resistance 1875 support, based on December futures.
We remain short gold, silver, and platinum looking for the downtrend to continue. For now, we do not see a reversal to the long side coming anytime soon, expect selling to accelerate. However, remember that in major downtrends. There are monster rallies that make you second guess your position. As long as our algorithm stays short, we will stay short.
Todd Horwitz Chief Strategist BubbaTrading.com
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