Wednesday saw gold and silver bounce after Monday’s big selloff. We expected a dead cat bounce which is exactly what we got. This morning the metals have erased all yesterday’s gains and are in danger of breaking key support.
With gold and silver potentially ready to breakdown, is there any chance that they can rally from here? The simple answer is yes, they can rally, however based on our work they are both ready to breakdown. If 17.50 December silver and Gold 1480 December futures do not hold then much lower levels are coming.
We all know that markets never announce themselves and anything can happen from here, but probability and statistics lean to the selloff continuing. We are still sellers of rallies at key levels if there is a rally. This sell off brings 17.25 -17.00 silver, 1465-1460 gold into play. Metals should be headed lower.