Gold, Silver May Decline On Synchronized Sell Off

Since April 1, precious metal bears should have been happier than a baseball fan sitting behind home plate on Opening Day. While that date did begin the 2013 Major League season, it also marked the start of a sizable downtrend that saw gold and silver prices plunge to nine, and even eight-month lows, respectively.

But according to this April 3 news source, many market participants were ill prepared for the synchronized sell off: "Precious Metals Decline, Led by Silver... It was a big shock to the market and it reacted accordingly." (Associated Press)

That's one way to see it.

Another way is through the lens of EWI's Metals Specialty Service intraday analysis. At the very onset of the recent reversal in gold and silver, Metals Specialty Service has truly been in a league of its own anticipating the turns down beforehand.

Here's a rundown of Metals Specialty Service's intraday playbook:

At 8:01 am on April 1, Metals Specialty Service's intraday update on gold presented the following chart and wrote:

“We can see the relatively narrow range that has contained gold intraday prices for almost seven weeks now. I think the best interpretation of what's going on is a triangle consolidation.... And following a test of the 1605 area, prices will ideally crack on their way towards 1575. This would be consistent with the development of a fourth wave consolidation in silver prior to another low."

At 7:52 am on April 1, Metals Specialty Service's intraday update on silver presented the following chart and wrote:

"Silver was unable to overcome resistance. I said a few times a while back that I thought the upside potential was greater than the upside and this is exactly why. The thrust could end at any time... We simply can't rule out another new low."

At 8:13 am on April 2, Metals Specialty Service's intraday update on silver reinforced its bearish forecast: "If a new low is coming, I suppose a washout of 27.50 would be the likely result."

Now that gold and silver have fulfilled their original near-term Elliott wave scripts, the question is: Where are the precious metals headed next?