Why We’re Trimming Longs in Silver ,Even Though It’s Still Bullish
Gold and silver gapped higher to fresh record highs, but the weekly time frame is sending mixed signals.
Last week, precious metals continued their upward momentum, led by silver. At the start of this week, gold gapped sharply higher to a new all-time high, driven by escalating geopolitical tensions surrounding Greenland. Both fundamental (news-driven) and technical factors are currently supporting further upside.
From a timing perspective, the "ninth signal" on the weekly chart is notably more pronounced in silver’s price behavior. Historically, during the previous five occurrences of this signal—even when silver was firmly entrenched in a strong bullish trend—it still experienced some degree of correction or sideways consolidation afterward.
This week, silver is set to complete its ninth such signal. Therefore, it may be a prudent strategy for long-position holders to consider taking partial profits at current levels.
As for gold futures, among the previous four occurrences of a similar setup, only one turned out to be ineffective—two led to pullbacks, and one resulted in high-level consolidation. Overall, this pattern still carries significant reference value and should not be overlooked.
Spot gold and gold ETFs exhibit a similar behavior, so additional charts are omitted here for brevity.
Moreover, we also note that on the daily chart, both gold and silver completed their ninth signal last Thursday—an observation that warrants some caution.
It should be noted that, as this is a weekly-chart signal, the cycle is only officially confirmed upon the weekly close. In other words, while a correction or consolidation may begin this week, it does not necessarily mean the rally has already ended on Monday (though that remains a possibility).More specifically, unless Monday’s gap is quickly filled, the more appropriate window to reduce long positions would likely be in the latter half of the week. However, if last Friday’s gap is unexpectedly filled early—on Monday or Tuesday—it would be advisable to exit positions sooner.
Moreover, the dominant trend remains clearly bullish, and the current timing signal suggests only a pullback—not a reversal. Therefore, it is unwise to aggressively attempt to "catch the top."
In an environment of continuously rising highs, simple technical valuation models can no longer reliably pinpoint a so-called peak.
If one genuinely believes the rally in precious metals has run its course, a more telling sign might be found in platinum and palladium, both of which have significantly underperformed gold and silver.
$Platinum - main 2604(PLmain)$
$Palladium - main 2603(PAmain)$
As was the case last week, we are not providing explicit trading recommendations for precious metals this week.
Last week, we placed pending orders on both the euro and Bitcoin. The long position in EUR/USD has already been triggered at 1.1615, with a stop-loss set below 1.1415 and a target at 1.2415.
Given the typically gradual pace of moves in the foreign exchange market, this is expected to be a medium- to long-term trade. We will continue to provide updates on the status of this position as it evolves.
$Euro FX - main 2603(EURmain)$
$CME Bitcoin - main 2601(BTCmain)$
The Bitcoin pending order was not triggered. Although the price has rebounded, it remains some distance away from the high-conviction, value-oriented entry level we were targeting.
We have already canceled last week’s short order and are now waiting for fresh signals and trading opportunities to emerge.
We expect the market will require external catalysts or news events to initiate a new directional move. In the absence of significant developments, another period of consolidation appears likely.
Regarding other strategies, there doesn’t appear to be a compelling opportunity at the start of the week. For now, we’ll remain on the sidelines and observe how the market digests the various weekend news developments before assessing whether any new setups emerge.
(The above is for informational purposes only and does not constitute investment advice.)
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