Gold & silver just had another spike low on Wednesday. To break-down the move and where the metals could be headed, here’s David Morgan…
David discusses the recent drop in silver and how it is another “spike low.” These massive down days are often very sudden quick drops. These “spikes” are a good entry and exit point if you’re looking to get into the market.
People don’t act consistently and keep to a simple strategy. He discusses what works for him in these markets and what he uses as indicators. He has bought this dip and will buy more if it drops again and expects a gradual price increase once the precious metals market gets moving and later on a price surge.
Mr. Morgan talks about the concept of overhead resistance and why its a psychological barrier to price increases. There is a lot of this resistance that has to be overcome before the price can move higher. However, these are small markets, and resistance could be quickly overpowered if there is a flight to safety. He would not short this market at this level.
David feels the next move up won’t be from a commodity boom. The market will likely bifurcate with gold, silver, oil, and agriculture moving up. There will be a run to safety with a move to the dollar first.