GOLD TRADE ALERT (2:45 pm EDT)
Even though we did not get an intermarket bearish divergence signal between gold and silver (one making a new weekly high but not the other) as I would have liked, both metals appear to be turning down now, and a short-term sell signal appeared in both of their charts today. Directional momentum continues to be strongly bearish across the entire precious metals market so we may be seeing the resumption of a significant correction that started from the top in gold of $1170 on Aug. 24. If so, we could be headed down towards the $1080 level (and possibly lower) over the next month or two. I am going to enter a short position in gold today with a stop loss for now in the $1140 area. All markets could be unusually volatile from now through the middle of October so I am going to hold off shorting silver (which tends to be more volatile than gold anyway), at least for today. Silver prices dropped significantly today (2.8%), but if they bounce and rally a bit into Thursday or Friday, we might get a better opportunity to go short then. Going short in gold today but still out of silver.
Even though we did not get an intermarket bearish divergence signal between gold and silver (one making a new weekly high but not the other) as I would have liked, both metals appear to be turning down now, and a short-term sell signal appeared in both of their charts today. Directional momentum continues to be strongly bearish across the entire precious metals market so we may be seeing the resumption of a significant correction that started from the top in gold of $1170 on Aug. 24. If so, we could be headed down towards the $1080 level (and possibly lower) over the next month or two. I am going to enter a short position in gold today with a stop loss for now in the $1140 area. All markets could be unusually volatile from now through the middle of October so I am going to hold off shorting silver (which tends to be more volatile than gold anyway), at least for today. Silver prices dropped significantly today (2.8%), but if they bounce and rally a bit into Thursday or Friday, we might get a better opportunity to go short then. Going short in gold today but still out of silver.
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