MTECHTIPS:-Gold, Silver heading for breakdown
Gold and Silver rebounded following the Fed minutes released last Wednesday. However, one week later both metals are back below pre-Fed levels and moving dangerously close to important support. Silver fell 2% on Tuesday to $15.81/oz, which is only 2.2% above its lowest weekly close of $15.46 which occurred seven months ago. Meanwhile, Gold closed at $1177/oz, which is only $20/oz from its lowest weekly close. In short, precious metals are flashing code red as a breakdown could begin in the next few weeks.Gold has held in over the past few months but its recent price action suggests trouble is ahead. Simply put, the price action in Gold is very bearish and current sentiment (not big picture sentiment) is nowhere near an extreme. This is potentially a very dangerous time for gold and silver bulls. At some point (perhaps in a few months), the switch will flip and we could have some epic buying opportunities in the precious metals complex. We are positioned to take advantage of this decline so that we can take advantage of those future opportunities.