Gold at key resistance

New York (Jan 21)  As we sit with our short positions in gold and silver both, have now reached a key resistance level. On Wednesday, gold reached significant resistance, failed, and then came all the way back to make new highs on the day. This type of action could lead to a reversal to the long side.

Gold would reverse to the long side on a close over $1,900 April futures at the close today. The levels change every day, but when short, they can only come down. Today's $1,900 could be tomorrow's 1895, depending on the action.

Silver is in a similar position with a close over $26.20 March futures. Today will go a long way in determining the next big move. Until proven otherwise, we are short and will stay there. However, we will be less aggressive in adding to our posistion based on the current price action.

We know that markets never announce their intentions, which is why the price action is the most important part of managing positions. Although we remain short Gold and Silver, we are still long Platinum, which looks ready to make new near term highs. Patience, discipline and caution are the words of the day.

KitcoNews