Gold and Silver - Bearish Engulfments

 Above is a chart of Gold (GLD) and as you can see, this market (along with silver) has put in a bearish engulfment pattern. A bearish engulfing pattern is a reversal signal which usually means that the current trend is about to reverse.

The last time we had a bearish engulfing signal was on November 9th and the market subsequently sold off into the November 16th low. What makes today's bearish engulfment formation much more significant is that it takes place at major resistance which is the high for the year. This is a powerful combination of technical events and in my opinion is a warning sign that the uptrend in gold and silver may reverse or move sideways for awhile.

A move below today's low will confirm the technical pattern and suggest that lower prices can be expected in the weeks to come. A move to new highs will negate the bearish outloook. Lets see what happens.