In my previous update on the metals, I alerted our readers that two very good potential short trades were setting up on Silver and Gold. Those trades came to fruition and have proved to be very profitable so far.
Gold holds support at the 1600 level which is also where it meets the longer term trendline (see above video) and the weekly 50 Moving Average. But I don’t believe this slide is over yet and I believe it is very likely that the September lows will be taken out either this month or in January.
A break below the September lows of 1540 could take gold to its monthly 21 EMA (exponential moving average). It has not tested this level since 2009.
Silver has recently fired off a bearish squeeze. Whilst we may have a temporary consolidation over the next few days, I feel confident that there is a high probability that it too will take out its September lows of $26.24 – which is great news if you’re looking to buy it cheaper down the line!
Likely support for Silver, if there is further follow-through, is $21.70 which corresponds to the weekly 200 MA and the monthly 50 MA.