Gold and Silver Bounce
After Monday’s beatdown in the metals, Tuesday saw an expected dead cat bounce. Oversold markets typically create a bounce back to a resistance level which is exactly what happened on Tuesday as gold failed at 1493.5 December futures. The overnight trade saw gold trade to 1490 and is now lower.
It would be no surprise if gold and silver churn at current levels before failing and heading lower. The next support level should be approximately 1440 and out target is 1420 in the current formation. The trend has changed, the metals are headed lower until there is a reversal.
Price action is always the key to the next move and in the metals the action is very negative. For now, we are sellers at resistance and will continue selling until we see a trend reversal again. News, the FED and other data mean nothing without price action to go with it.