By Jeff Pierce

Gold and Silver both look as though they are approaching some obvious support levels and when I start to see things that look too obvious I start to think the opposite is going to happen.

Gold’s support is roughly $1160-1220 as it’s not even in that zone yet, but Silver is in it’s support zone ($18.20-18.70) Watch how Gold reacts at it’s upper level or how Silver reacts to it’s lower level (whichever comes first) for clues. It’s to early to know if support is going to hold and placing bets right now in my opinion is really just gambling.

One other indicator that concerns me is the RSI for both of these charts. Both RSI levels are starting to gain steam on the downside and there isn’t really any positive divergence, which would be a key if these markets were going to bounce. In fact, the more selling we see in these charts the RSI will weaken considerably further, indicating a big move down is coming. Another way to look at it is the chances of a snap back rally decreases the weaker the RSI is.

gold silver

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