In Monday's blog on gold and silver I wrote:
"...gold and silver could be ready to turn very bullish, but it all depends on whether or not they started new medium-term cycles in November. They may have, but it is still not certain. If they are completing older cycles, prices could go considerably lower this month. If we do see rallying this week, we want to see gold close above $1,200. If it doesn't, we may have to abandon our bullish expectations."
Well, gold did not rally much this week; in fact, it made a new low on Monday ($1,159) and is closing the week near that low (around $1,160). It is starting to look like this could be an older cycle that's going to go lower. Silver did rally a bit but it may have topped out on Wednesday at $17.23. That was a new weekly high for silver while gold did not exceed its high from last week (intermarket bearish divergence). There are several other short-term technical signals now that also suggest these metals are turning down. For all of these reasons, I am going sell my long position in gold today and take a small loss (about 2%). This market may already be anticipating a rate hike from the Fed next week which would likely boost the U.S. dollar and put downward pressure on precious metals. If that happens, we could see gold and silver make their final cycle bottoms near the end of the month. Selling my long position in gold today and still out of silver.