Thursday, January 30, 2014
Do gold and silver break down here?
It's broken if it drops below here.
Problem is, silver's an industrial metal, and apparently there are looming oversupply issues that are completely different from the supply/demand balance for gold; but people still seem to trade silver as if they think it's a leverage to gold.
In which case, gold might take a hit just because people see silver going down.
As far as industrial metals are concerned, copper looks pretty bad:
That's quite a nasty downward trend. Though I guess this chart's scale makes it look worse than it really is.
What's gold like?
Uh-oh! It's already broken the upward channel support line, and now it's threatening to drop below its supporting EMA and Bollinger mean.
Now, there's still the SMA(50) supporting it, so maybe it just drops, retests the SMA(50), and goes back up. But worries spreading through the market about an emerging markets crisis and a Chinese banking system collapse (whether or not you think these worries are at all realistic) should make the market scared of owning gold, no?
So, it looks like we'll see in the next day or so if this was it for the gold bounce.