Gold and silver take a beating

30 Apr

Gold and silver were sharply lower overnight. While not as violent as last week’s drop, the sell-off has certainly taken the gloss off the positive sentiment which was slowly returning in the latter half of last week. There was some good news early on in that gold traded above $2,300 throughout the morning suggesting that many investors were holding their nerves. But by the afternoon, the selling took hold again, and this time it was enough to break $2,300, but not definitively. Silver’s decline has taken it back below $27 per ounce, which was a minor support level. Traders will be wary of rushing back in and adding to their long side exposure, especially as the chart shows up a bit of a ‘no man’s land’ between current levels and the area just south of $26 which had previously acted as resistance. There was no obvious trigger for today’s pull-back, and as far as the charts are concerned, there’s been no real damage done as far as the bulls are concerned. Of course, that could all change should precious metals react badly to anything that comes out of tomorrow’s Fed meeting, or Friday’s Non-Farm Payroll update.