Prices tumbled hard and fast with no breaks or support at the pivotal $1525 area. Several market reports blamed the drop due to the hawkish remark from the Fed leaked minutes, Cyprus selling their gold reserves and the London physical market that froze and hinder any purchases. Short selling dominates the day and it came at a time when investment banker’s prediction of the bloodbath came true.
In our last commentary, we have advised cautioned and will continue to stick with it (see below). However, gold buyers remain sceptical and maintain a cautious view on another gold rally. In the meantime, we will remain cautious and wait for another pullback before adding into our long position.
The market will remain turbulent and volatile as the early Asian trading hours faced long liquidation. Investors scrambled and panic selling took hold in a thin market. We could see a quick drop in price before a reasonable rebound (a dead-cat bounce) before further selling to determine a bottom.
- Short gold at $1475 target $1460 with a stop loss at $1480
- Short gold at $1555 target $1525 with a stop loss at $1561 (cancelled)
- Long gold at $1578.50 target $1603 with a stop loss at $ 1555.50 (Stop out)
- Long gold at $1576 target $1603 with a stop loss at $1580.00 (Profit after SL breached)
$1572, $1590.4, $1592, $1604, $1620
Support: $1551, $1541, $1539, $1522 (2012 low)
Silver remains weak and price movement is blighted by weakness in gold. The bear market has taken grip on silver which may have more room to the downside. We will not guess how big the damage will be but mainstream media have suggested that silver could retest previous low at $24 and in worst case scenario back to $19 an ounce.
It is impossible to suggest where the bottom will be but staying on the side line is a better option.
- Long silver at $27.45 target $27.85 with a stop loss at $27.15 – Profit
- Long silver at $27.65 target $28.20 with a stop loss at $27.75 (SL hit)
- Short silver at any rallies
$28.35, $28.87, $29.50
Support: $24.00, $19