Gold futures in the December contract are down $8 this Friday afternoon in New York currently trading at 1,214 hitting fresh nine month lows while still trading far below their 20 and 100 day moving average telling me that the trend is to the downside as the U.S dollar hit 2 year highs against many of the foreign currencies pressuring the commodity markets and especially the precious metals this week.
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The chart structure in gold has improved dramatically and if you took my original recommendation and sold the breakout at 1,278 make sure you place your stop 10 day high which currently stands at 1,243 an ounce and that will improve in the next several days as the next major level of support is 1,180 & if that price level is broken prices could slide rather dramatically.
Gold prices settled last Friday at 1,216 finishing slightly lower for the trading week as volatility has certainly increased as prices were up $20 a couple of days back on the news of the coalition & the United States bombing ISIS but then prices came right back down as I still think lower prices are ahead as there’s no reason to own gold right now especially with a very strong U.S dollar so continue to play this to the downside making sure you place your stop above the 2 week high.
TREND: LOWER
CHART STRUCTURE: IMPROVING
Silver futures are trading far below their 20 and 100 day moving average settling last Friday at 17.84 going out this Friday in New York around 17.55 finishing down about $.30 hitting a 4 1/2 year low as the U.S dollar continues to pressure silver and the rest of the precious metal complex.
If you took my original recommendation several months back when prices broke 20.44 which was the 4 week low continue to place your stop above the 10 day high which currently stands at 18.85 and that will start to improve late next week as the chart structure will tighten up, but I still believe prices look vulnerable even at these multi year lows.
The trend is your friend in the commodity markets and the trend in the U.S dollar is clearly higher and that’s pessimistic all commodity prices, but if you have missed this trend sit on the sidelines as you have missed the boat as you do not want to chase markets that is why I like to find the trend as early as possible as my rule states a 4 week high or a 4 week low has to occur before entering.
TREND: LOWER
CHART STRUCTURE: IMPROVING
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