Metals really took it on the chin this past week. Silver had the biggest sell off of the group but gold too fell down hard. Silver remains in an overall uptrend, while gold on the other, hand continues to consolidate or drift with its range.
We remain bullish silver unless we close below 12.00 next week. If that happens then we open the door to a bear market in silver. Gold too needs to hang onto support at 600 if we have any hope of seeing 650 before this quarter is out.
The main reason for the sell off is the strength in the US dollar and that strength is based on the idea that inflation is heating up. So that begs the question, how can inflation be rearing its head and at the same time the number one hedge against inflation sells off? I would ague that this sell off is simply an shakeout. This sell off however, gives traders a great low risk entry point on the long side with stop and reverse orders just below critical support levels that I mentioned above.
Comments are closed.