Gold and silver are tracking crude oil prices and nothing else. Crude oil prices have rebounded from the low of $57.33 to $60.20 while gold December future has rebounded from the low of $563.50 to $574.10. Silver and copper futures have also rebounded from the low. The US dollar is trading in a range ahead of the ECB meeting against the Euro.
Average volatility in gold and silver has increased substantially over the past few weeks. This is not the market for low risk traders. One should either become an investor or an intra day trader with a high risk appetite. Lower stop losses will be useless as it is bound to hit. One needs to patient and “Wait and Trade” and Not “Trade and Wait” and also keep on booking partial profits. Gold yesterday was rising $3-$4 only to fall $7-$8. These are signals of a short term bear market. But the recovery from the lows is equally fast. The current market is testing the reflex action of day traders as well as jobbers.
Crude oil as well the movement in the US dollar will continue to dictate gold and silver prices. It’s a bit difficult to comment on where the short term bottom will be. I find crude oil an attractive medium term investment near $57 as crude oil has a strong support between $55-$56 and only if crude oil falls that there will be further losses.
GOLD -- DECEMBER FUTURE
Gold needs to break and hold $575.20 to prevent further losses to $562.60 and $548. On the higher side $586.50 is the initial resistance with $598.50 and $608 as the key short term resistances.
SILVER -- DECEMBER FUTURE
Silver needs to hold $1052 on closing basis to prevent a retest of $980. On the higher side $1137 and $1192 are the resistance zones.
Happy Profitable Trading
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