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Three Signs That the Bottom in Gold & Silver Is Near

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Could provide excellent buying opportunity for long-term investors.

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Silver



The first thing that comes to mind after taking a look at the above chart is that silver (SLV) has held up very well during the current decline. I've thought for some time that the situation in the silver market was particularly favorable.

As far as the target for this decline is concerned, the situation is similar to the one in the gold market. The areas in which the bottom is likely to take place is marked with a red ellipse and contains levels corresponding to 2 important Fibonacci retracement levels: 38.2% and 50%.

3. Prices of many assets often correct these parts of their previous move before resuming their main trend; for example, the 38.2% level stopped the decline at the beginning of March. Another important level that this ellipse contains is the lower border of the short-term trend channel; if we get the C decline of the ABC, or zigzag, correction it may go exactly to this support level. I currently view such a decline to be likely.

Summary


After having rallied in May, the whole precious metals sector entered a corrective phase, which began two weeks ago. Currently many factors suggest that the end of this correction is near. The coming bottom is likely to provide a favorable buying opportunity for long-term investors with the "buy more on the dips" approach. Short-term traders are advised to consider preparing themselves for opening long positions and closing remaining short ones in the coming days
No positions in stocks mentioned.

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