Gold, silver and platinum under pressure

London (Sept 25)  What does Thursday’s rally in gold, silver and platinum tell us? The answer lies within the price action and weakness of that bounce. The metals are under pressure, which shows no sign of letting up.

On Thursday, gold was volatile, trading within a $29 range. However, most of the day, gold showed weakness and little desire to rally. Gold is slightly lower again this morning, indicating there is more selling yet to come. The key support level to watch is $1,850 in December gold futures; a violation below that level brings 1800 into play.

Silver and platinum looked very much the same as gold. The lack of enthusiasm from buyers tells us that these markets are headed lower. Although we never trade or decide based on news items, the fact that the dollar is gaining strength will also be a headwind for the metals.

We remain short all three, with no sign of a reversal soon. Based on recent price action, there is a greater likelihood of a breakdown to test much lower levels from here. We will continue to observe and sell rallies as the downtrend continues.

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