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December 14, 2014

Why We Shouldn't Get Excited About Silver Just Yet

Every time precious metals bounce, gold and silver bugs begin declaring a new bull market. They have been consistently wrong for 3 1/2 years, yet the most recent bounce has these characters out en masse once again. One of these days, their prognostication will be true, but quite a bit of technical damage must be undone before a technical trader can justify aggressiveness.

Breaking the bear market downtrend would be a good start, but silver is likely to find greater resistance at the $19 pivot. Breaking and holding above $19 would then offer the opportunity to form a tradable, bullish setup.

Mining shares are hardly providing any support to the bull case.

Perhaps these technical obstacles will be pushed aside in coming weeks, but until precious metals markets show some vigor, I am uninterested in anything more than short-term trades.

 

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