One of my indicators I wrote about a few weeks back tells me whether we are about to turn a corner on metals. On Friday, because of this indicator, I wrote the following as a reason why gold might bounce up a bit.
I expect some continued selling in Asia come Sunday afternoon as stops are hit with the break of the low in the U.S. today and come Monday morning when the precious metals market open here, we could see a lower open. There is not much that will convince me that we’ll all of a sudden pop higher on Monday, however this low of $1,190 is a good spot that we could bounce higher which is a price level to watch and see if it holds.
That indicator was the amount of sales I had on Friday. We had some continued selling in Asia as I thought and we bounced from there and it looks like that $1,190 price held and we are up $12 as we speak. Perhaps more short covering will be triggered if we get a move a bit higher. Today’s sales weren’t as high as Friday, yet they were still substantial.
This may mean a continued move up tomorrow and the possibility of some short covering if indeed we do get a move higher. The big picture tells me any bounce, no matter how strong or long, will be followed still by lower lows. For this reason, it is simply a traders market. All 3 scores for GLD, SLV and GDX came in at -90 pointing to a continued strong downtrend.
After hours today, gold and silver are somewhat flat. Of note today the dollar did take a breather and fell below 86 on the index.
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About Doug EberhardtDoug Eberhardt is a 28 year financial services veteran and precious metals broker selling gold and silver at 1% over wholesale cost. Doug has written a book to help investors understand how gold and silver fit into a diversified portfolio, how to buy gold and silver, and what metals to buy. The book; “Buy Gold and Silver Safely” is available by clicking here Contact phone number for Buy Gold and Silver Safely is 888-604-6534
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