Gold and silver prices seeing wild yo-yo action

New York (Aug 28) Yesterday was about as wild as it gets when it comes to trading precious metals. Early morning gold and silver were flying higher, but by the end of the day, they had made new lows and ended up closing down.

This type of action typically indicates a much bigger move is coming. The question is: is the trend reversing to the upside, or is there a much bigger break coming to the downside? As of right now, we cannot determine the direction, based on our positions and algorithms, we are still short, gold, silver, and long platinum.

Yesterday we wrote that we were not adding to our short positions based on the overall action we were seeing. For now, it is a challenging trading market. This morning looks like a potential repeat of yesterday, although we will not be reversing today. It is possible, if the rally continues, we may take a day trade a short position.

For now, we will sit tight with our short position and watch the market action but will be short, gold, silver, and long platinum until at least Sunday night. We never get caught up in day-to-day emotional swings with the exception of a one day trade, which is based on another pattern that we use.

By 09:15am EST Friday, spot gold spiked to up $23 to $1,964. But then slowly slid downward to $1,954. Likewise, spot silver saw yo-yo price action (up and down).  The same yo-yo price action was prevalent in spot platinum and palladium...but actually down on the day at this moment.

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