I apologize for posting a late trade alert here, but I was traveling for most of today and didn't get to analyze the markets until the early evening. Please note that I am presenting this as a short-term trade. My present short-term view of gold is that we will likely see a rally to the $1400 resistance area and then see the price turn down again. If we go long now and that situation unfolds, we would take a small profit at the top (or possibly break even if the turndown is rapid and sharp and brings us back to our entry point). If gold can break through that $1400 area, however, then we would obviously stay long. As I mentioned in yesterday's blog, there is a possibility the final bottoms in gold and silver are already in (although my bias is that they will go lower before the end of the year). If the bottoms are in, prices could take off from here. Long-term traders may wish to just stand aside here, and I would suggest even short-term traders put only a portion of their normal funds allocated to precious metals into this trade. There are not enough bullish signals right now to be certain that we have seen the final cycle bottoms in gold and silver, so I am not ready to go heavy in these metals just yet.
Gold did not pull back today (as I would have liked) and it ended up closing around $1343. Nevertheless, I am going to go long here with a stop loss point just below the support at $1300.
Silver did pull back a bit today and closed at $20.32. I am going to go long here with a close stop loss just below the support at $20.
I am placing these trades tonight and hoping prices do not gap up when the markets open tomorrow. Any traders reading this blog Wednesday morning after the markets open should avoid the trade if prices have risen significantly. (UPDATE- Wednesday, 7/24, 1:30 pm EST- Gold has fallen a bit more today and remains above $1300 support while silver is resting right on top of support at $20, so entry points for the short-term trade described above are now ideal. Momentum remains medium-term bullish.)