Last Monday, we also wrote about gold. On that day we were bearish. The previous piece ended with this:

“The sell signal is on as long as we stay below the green line. Do not forget that on gold, we are very close to the long-term upwards trend line (10 years). A breakout of such an important support could have catastrophic consequences".

(Click on image to enlarge)

Today, we will continue with our negative outlook, but we will switch to gold's younger and smaller sibling – silver, where the price is having a strong sell signal as we speak. The last few days here have actually not been that bad. The price was climbing higher, but it all eventually ended with a head and shoulders pattern (blue rectangles), which is a very negative sign for buyers. The neckline (black) of the H&S was already broken, but the most important support here is the yellow area below 14.5 USD/oz. If the price closes the day below the yellow area it will be a trigger to go short.

The sell signal will be denied when the price comes back above the neckline, which as for now, is less likely to happen.