Gold And Silver Look Set To Slide

This week has been all about the new risk-on Bear Pennant to have popped up recently and a theme explored through the confirmed and fulfilling patterns showing in EURUSD, the CRB Index, copper and crude along with the unconfirmed but nicely formed Bear Pennants showing in most equity-related charts. Ignored here have been the precious metals that have been trading more with the risk assets following the Fed’s various liquidity efforts in recent years and this means the same Bear Pennants plaguing equities, crude and copper appear to be showing in gold and silver too.


Prior to turning to the numbers around gold’s Bear Pennant, it should be pointed out that this could turn out to be a Double Bottom that confirms at $1,594 for a target of $1,659 per ounce, but this outcome seems less likely in considering the fact that this same pattern has already broken to the downside in the CRB Index, copper and crude as has been noted and this puts the attention on the Bear Pennant that confirms at $1,529 for a target of $1,464 per ounce. Such a potential drop seems supported as well by the likelihood of the bottom trendline of the Descending Trend Channel pulling gold down and closer to $1,425 per ounce.


Silver is showing the same pattern and one that confirms at $28.89 per ounce for a Double Bottom target of $31.03 while the more likely to fulfill Bear Pennant showing confirms at $26.75 per ounce for a target of $24.61 per ounce with the bearish outcome more likely in the context of that Descending Trend Channel that is likely to pull silver down toward $22 per ounce in Q2/Q3.

Such a potential drop appears to be supported by the gold/silver ratio, too, with an Ascending Triangle-type pattern that confirms around 59 for a target of about 72 and a level that truly supports a drop in silver and, by extension, gold.

Maybe gold and silver trade sideways a bit more with the possibility of some contained upside thrown in, but most likely is a continuation of the precious metals plunge that began last September with gold and silver looking set to slide.