Last week we wrote that gold and silver were possibly turning, or it was a trap. We stayed short, indicating our belief that the strengths were more of a trap than a reversal in trend. This morning is proving that out as the metals are under pressure.
This is not a final score and the markets can still switch directions, but the recent action indicates more trouble for the metals. We are expecting new recent lows to be made and a possible test as low as 1400 Gold based on the February futures and 1650 Silver based on March Silver futures.
The continued struggles and inability to break above recent resistance leads us to believe that there will be more selling, and rallies are meant to be sold until further notice. We will stay short and look to add to our position on rallies to resistance.