Gold and Silver finally had a significant down day today as gold was down about $11 and silver down about $.20. We were certainly due for a correction as many silver stocks hit or were close to 52 wk highs this past week and have increased in value about 7% in the last 2 weeks.
It’s hard to say if this is the start of the next pullback but this last runup does look similar to the previous ones this year that were followed by major corrections. So if there’s any time for one, I’d say that now would be the best time to play short term put options.
Silver has been doing a lot of catching up by taking out its former 52 wk highs, but it has been there before, followed by sharp downward corrections. Something about these metals rallies still tells me it’s a seasonally based and a true breakout would be much more obvious and news-based. I’m probably the most skeptical commodities bull around, as I consistently downplay big rallies on the fact that there are plenty of other market forces that are keeping metals within certain ranges.