Gold and Silver showed a little resilience on Tuesday, recovering losses after being down big early. They are now in a consolidation pattern deciding on which way they will breakout on the next big move. They can go either way from here, but the odds suggest they will break to the downside once again.
When watching patterns develop, we are always watching the phases of the markets. The consolidation phase which are in once again suggest a move is setting up. Based on the facts we can see the information available the breakout should be to the downside.
At this point there is no reason to expect a rally, that doesn’t mean there won’t be one, but we are playing the probabilities which suggest the metals are still headed lower. We will remain short and look to sell rallies until further notice. It’s that simple, if the probabilities shift, we will switch to the long side.