Gold, Silver and Platinum are all in similar patterns, all in a downtrend, all consolidating between two levels and all looking to breakdown. We have been short since mid-August and now look for the next big move to the downside.

Since all markets are the same and all trade in geometrical patterns, the key is identifying the pattern they are in. The pattern and our algorithm are short, indicating a downtrend. When looking at the phases that markets trade, they are congestion, breakout and blow off. Looking at Gold, Silver and Platinum, we can see a clear downtrend pausing in consolidation. This tells us that the metals are ready for another big move, which we expect to be lower because of the general downtrend.

The levels we are watching now are December Gold support 1875, resistance 1950, December Silver support 23.5, resistance 25 and January Platinum support 840, resistance 900. Until one side or the other is violated this pattern will continue and eventually breakout in either direction. Based on what we can identify now, the next big move will be lower.

Many times, we have written about different markets and expectations. Once a trend has been identified, expectations are for the trend to exist until it does not. If you remember, a trading decision should never be made on anything subjective, decisions must always be made on the facts of the chart patterns. Those decisions won’t always be correct, but the probabilities are in your favor to trade based on those patterns, it’s that simple.

Todd Horwitz Chief Strategist
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