Gold and silver both took significant hits today as stronger than expected US GDP numbers of 3.1% after the market had expected 2.8% to be the number. As will all accelerated selling, stop loss orders were clearly triggered when prices broke through technical support. What had been support for silver for example around the $30.80 area quickly turned into an area of accelerated selling when that level was taken out.
I’ve personally been warning that another round of selling was imminent for the metals and that I was really treating the bounce off the recent November correction was just that… a counter-trend bounce and it looks like silver may actually be on course to the lower targets that I had envisioned for it, but that it is just taking longer for it to get there.
The bank of Japan also announced another round of stimulus today (so much for the arguments that further stimulus would send the metals to the moon). If this correction gathers steam, expect prices to go much lower before making an attempt to turn higher.
Currently, I am not actively trading the metals because I am quite busy with work and because I don’t want to get caught up in end of the year tax selling that makes markets less predictable. If I were I would be providing charts. Suffice to say, I would not be buying until there is clear evidence that this selling has ended. We needed greater chart consolidation and I believe, and hope, we are finally getting it.