Gold and Silver Fail at resistance
There are many reasons why gold and silver should rally from here and only one reason that they shouldn’t. On Thursday the metals were spiking higher before failing at resistance levels. Right after 10:00am EDT the ISM services number came out and like the manufacturing number was a miss sending the metals screaming higher.
As the news was digested markets suddenly started to reverse. The DOW was down almost 300 before spiking and closing higher on the day. At the same time Gold traded as high as 1525 before closing at 1514, below the 1520 resistance level. The recent dead cat bounce in Gold should be over and the lower trend should continue.
The reasons given for the rally are low interest rates, global economy meltdown, dollar uncertainty and a few other fears. However, at the end of the day markets always revert to the technicals and in the case of the metals they are in a downtrend. As long as Gold stays below 1520 and Silver below 18.50 we are sellers.