Gold crashed through the recent 1080.0 low, as discussed earlier this week. Like Sunday night’s selling spree, the market quickly found some buyers, and found equilibrium at a level well above its extreme low, but still much lower than yesterday’s close. In the days ahead, be suspicious of any rallies, and wait for a daily close above the high of the low day before looking for something meaningful to the upside.
Silver took out the 14.49 level, as suggested in my last commentary. Lower prices and more new lows are the obvious expectation here, and a test of that 14.10 level mentioned on Wednesday seems possible in the coming days. Look for a daily close above the high of the low day to signal an end to this leg of the bear market.
Platinum has been consolidating for the last few days, but yesterday’s failed rally attempt points to more new lows. A penetration of yesterday’s high of 999.7, especially on a closing basis, will identify the July 20 low of 946.30 (October contract) as a significant bottom. A penetration of 946.30 will signal a continuation of the bear market. Long-term market support levels are much lower at 761.80.
Yesterday’s failed rally ended in a lower close, and that selling pressure has spilled over into today. Watch these two levels for clues to the next intermediate-term move: the high from Thursday at 641.50 and the July 20 low of 595.0 (September contract). If 595.0 is taken out, we will turn our attention to the 555.90 low from 2012.