Gold Market Wire
News, analysis and commentary for gold traders and investors
Silver Market Update
Metals Show Signs of Stabilizing
August 11, 2021 - (Gold Market Wire) - The Metals markets are showing signs of stabilizing as Gold and Silver produce a tentatively positive day. The sell-off has been sharp and brutal, and was done into the Asian market, at a time where illiquidity would produce maximum effect. Nobody trades out of a position that way (with any brains) so, either some algo dumped everything - quiet possible since it kicked off exactly at midnight CET - or someone co-ordinated a raid to force everyone out of the market. That also is a possibility, this being August, but the market, as we noted prior to the event, was looking sickly, which was why we closed our core position.
As it stands now, we are still holding our spec long, which we are more or less flat on, but we are changing the outlook as of today.
From here we will start to rebuild the core we shed, bringing it back on the book at $1.40 under where it was established in April. Moreover, we are taking length on the trading position, here, leveraged lightly.
The sell off was brutal, no doubt, and thankfully we had got out of the market in advance. Our spec happened during the evening and we were fortunate to miss the roller-coaster. But, it looks like the carnage has abated. The sell-off has not continued, the technical bottom in Gold held, and we are of the opinion that the failure of New York to significantly continue the sell-off is telling us that we have a decent chance for a bottom here. Being courageous in trading is a fool's errand - the more so in Silver. But being contrarian, and buying the aftermath of a major rout, while still believing in the Bull, is an opportunity. And we will take it.
As we back out, we can see a longer view that confirms our chart parameters.
It is, of course, perfectly possible, that we will work down to $22 before the carnage ends, but we are sizing for that eventuality. If we start to trader consistently under $22, we will have to scale back the trading position, but we will be holding the core we are establishing here. We still think the long tail from Monday is telling us that the poorly positioned length has been cleared out, and the weak hands have been bled. That means length should be established.