Gold/Silver: It would be foolish not to own Gold and Silver down here

Standard Posts

/ | Leave a comment

In futures trading, there’s an old saying: “When they’re cryingyou should be buying. When they’re yellingyou should be selling.” That ideology pops into my head not often but in certain occurrences, i.e., Crude Oil trading at negative $30 in 2020 or Silver trading above $50 in 2011. Either way, you better be buying one and selling the other. In 2011, when Silver reached $50, most of my client base was heavily long Silver futures, along with $30-$40 call spreads and others with the $35 strike outright. The amount of money many of these clients made was life-changing, but there were those few who refused to exit under any circumstances. Many whose lives changed sold “some” of the positions, took the money and bought second houses, paid off debt, or rolled it into new investments. For the few who refused to sell any, I watched as their personalities went euphoric as prices rose, then profit taking took place, followed by disbelief and finally panic as markets crashed. 

The environment we are currently in does not justify a move to $30-$40 or $50, but neither did the months or years ahead of 2011’s dramatic rise. I talked to one potential client who indicated that he wanted to open an account to go “all in” on Silver due to the potential for an imminent market crash. While I agree there is peace of mind in holding a hard asset (over 5000 oz, the CME offers a loadout for delivery), the prospect should consider “Dollar-cost averaging” Silver futures while having an options overlay similar to my strategy in 2011. The prospect should also consider owning Gold and S&P put options and determine the catalyst for the crash itself. Perhaps they should also own Crude Oil calls if it is the “higher for longer” theme due to rising energy prices. Once a “crash” finally happens, someone might want to consider 10-year Treasury calls because as the Federal Reserve goes into “panic mode,” they will be forced to cut interest rates, driving the price of Gold and Treasuries higher. Now, this is not investment advice; these are my random thoughts on where we are price-wise, knowing that the prospect is most likely right, a crash is ahead of us, but pinpointing that exact date has been challenging. 

Daily Gold Chart

Gold futures have broken below the psychological $1900/oz and have opened the door for lower prices. Last week, I drew a simple line of support and resistance, indicating where I believe a “violent” move would occur. Unfortunately for the bulls, it was a breakdown in prices. While we welcome lower prices for Q1 2024 positioning, there is no specific “hard bottom” to look for, and only a close above $1962 will switch the current trend from bearish to bullish. Having the flexibility to enter and exit the market quickly makes it essential for Precious Metals investors to have a futures trading account alongside their core Physical Precious Metals holdings. If you are interested in speculating on the rise and fall of the price of Precious Metals on a shorter-term basis, such as two weeks or two months, or If you have never traded futures or commodities, check out this new educational guide that answers all your questions on transferring your current investing skills into trading “real assets,” such as the 1000 oz Silver futures contract. You can request yours here: Trade Metals, Transition your Experience Book

Daily Silver Chart

Silver’s wedge pattern broke to the downside this week, and the critical $23 support level was violated. The trend reversal point remains at $24.16, and only a close above will negate the current bearish trend. The Gold/Silver ratio has pushed back up to resistance of 83:1, indicating that Silver has fallen into “oversold” territory. We recommend beginning to scale into the Silver market by Dollar cost averaging for core long-term positioning. If we have some “short covering squeeze,” traders working closely with me have added bull call spreads into March 2024. If you want to learn more about longer-dated calculated risk strategies in the Silver market, don’t hesitate to contact info@bluelinefutures.com

We have recently updated our “5-Step Technical Analysis Guide,” which will provide you with all the Technical analysis steps to create an actionable plan used as a foundation for entering and exiting the market. You can request yours here:  New 5-Step Technical Analysis Guide.


Sign up for a 14-day, no-obligation free trial of our proprietary research with actionable ideas! Free Trial Start Trading with Blue Line Futures Subscribe to our YouTube Channel
Email info@Bluelinefutures.com or call 312-278-0500 with any questions -- our trade desk is here to help with anything on the board!

Futures trading involves substantial risk of loss and may not be suitable for all investors. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.

Blue Line Futures is a member of NFA and is subject to NFA’s regulatory oversight and examinations. However, you should be aware that the NFA does not have regulatory oversight authority over underlying or spot virtual currency products or transactions or virtual currency exchanges, custodians or markets. Therefore, carefully consider whether such trading is suitable for you considering your financial condition.

With Cyber-attacks on the rise, attacking firms in the healthcare, financial, energy and other state and global sectors, Blue Line Futures wants you to be safe! Blue Line Futures will never contact you via a third party application. Blue Line Futures employees use only firm authorized email addresses and phone numbers. If you are contacted by any person and want to confirm identity please reach out to us at info@bluelinefutures.com or call us at 312- 278-0500





© 2022 by Blue Line Futures, LLC. All rights reserved.
Futures trading involves substantial risk of loss and may not be suitable for all investors.

Privacy Policy Illustration by Freepik Storyset

Get in touch with us today.
Press the contact us button to reach out to us or take a look at our social media pages.

Contact Us


Futures trading involves substantial risk of loss and may not be suitable for all investors. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.

Blue Line Futures is a member of NFA and is subject to NFA’s regulatory oversight and examinations. However, you should be aware that the NFA does not have regulatory oversight authority over underlying or spot virtual currency products or transactions or virtual currency exchanges, custodians or markets. Therefore, carefully consider whether such trading is suitable for you considering your financial condition.

With Cyber-attacks on the rise, attacking firms in the healthcare, financial, energy and other state and global sectors, Blue Line Futures wants you to be safe! Blue Line Futures will never contact you via a third party application. Blue Line Futures employees use only firm authorized email addresses and phone numbers. If you are contacted by any person and want to confirm identity please reach out to us at info@bluelinefutures.com or call us at 312- 278-0500


Performance Disclaimer

Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program.

One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading. For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results.

To top