Gold And Silver Update, Commentary And Charts

Years from now few will be talking about gold, including us.  Lately we're discussing it daily. 

The long-term outlook is that gold and silver will go much lower.  Near-term, the chance of a bounce has increased to nearly certain. 

Here's a look at a multi-year chart, on which we've illustrated possible trend support in green:

On Monday we wrote:  "The chance of a bounce is now 80% in our estimation, which means there's still a very high chance of a further collapse in which case we'd top up the positions further.  A 20% chance of a continued collapse is huge, especially when speculating using levered positions and options as we mostly are." 

Tuesday we wrote that "another plunge wouldn't be out of the norm given the present set-up.  Going long for a bounce, or remaining heavily short, are both risky positions at this point.  In the longer term, shorts should continue to score.  Successful speculators understand risk and manage it accordingly."

Today gold plunged again and we did top up the positions in which we'd made initial entries per this post late last week.



We repeat that if you're not trained and consistently successful in chaotic, fast-moving markets then you should step well aside.  Keep these recent valuable warnings in mind. That was posted May 22.  This was posted April 19. 

Quoting from the last link (April 19): "Whatever the short-term brings, any moves higher in gold and silver should eventually prove to be just bounces on the long way much further down."

Here's a 2-month chart of GLD:

Quoting from the previous link (May 22): "There's a good chance of one more leg down [...]  It could be a small drop, or massive with the resulting bounce not even making it back to today's levels."

Keeping that quote in mind, if there is a bounce we won't be greedy and hold on too long.  Positions taken today will be closed quickly if quick large profits are offered, in that way reducing risk and mitigating the costs of the positions taken late last week.   


We've updated our graphic showing the ongoing progression in psychology of gold and silver bugs:

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