Gold and silver are still difficult to call right now. In Tuesday's blog I wrote:
"Directional momentum in both metals is mixed bullish and bearish. Some technical studies are showing the possibility of a breakout now followed by a strong rally, but others seem to indicate an imminent correction to new lows that could approach or even exceed the lows from late 2015. Thursday could be a pivot point for this market so I am going to wait and see if gold and silver prices can edge closer to those resistance lines ($1,200 and $17) before considering any short positions."
Well, today gold prices got to $1,206 but then backed down and closed around $1,195. Silver got close to $17 at $16.96 then closed around $16.77. We are in a reversal zone for gold and silver (which ends this week) so this could be a turning point for a correction. The thing that concerns me, however, is the possibility that both metals started new medium-term cycles in mid to late December. If they did, this market could be turning bullish, and any correction now would be very minor and followed by a strong rally. If these are still older cycles coming to completion, the correction could be much more serious. Either way, some kind of correction seems imminent so I am going to enter a short position in gold now for the opening of tomorrow's market. There is strong resistance for gold in the $1,200 - $1,220 range so we can base our stop loss on a close above $1,220. If prices edge up tomorrow but remain under $1,220, we can set our stop loss next week on any break above tomorrow's high. Let's stay on the sidelines of silver for now. Entering a short position in gold for tomorrow's (Friday's) market open