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Predictions For Gold and Silver After the U.S. Strikes Syria Foolishness of the Momo Crowd

Commentaries & Views

After the U. S. struck Syria with missiles, the momo crowd has been buying gold and silver aggressively.  I will give you my long-term prediction, but first you need to be aware of the foolishness of the momo (momentum) crowd.

Foolishness Of The Momo Crowd

To understand the foolishness of the momo crowd, take a look at the chart of gold futures after the news broke.

Please click here for the very short-term annotated chart of gold futures.

Gold futures spiked over $1271, only to fall back to about $1253. 

Please note from the chart that VUD indicator does not show consistent buying. VUD indicator is the best indicator I know of measuring real buying and real selling in real time. Technical pattern of note is that gold crossed to the upside 200 day moving average.  This was bullish.  Now gold has crossed 200 day moving average again to the downside. Before putting too much faith in technical patterns, please see Mom and Pop Gold Traders' Lunch Eaten By Professionals, How Not To Become a Victim. ETFs of interest are gold ETF (GLD), silver ETF (SLV), gold miner ETF (GDX), and junior gold miner ETF (GDXJ).

The momo crowd was buying at $1270 and is now selling at $1253.

Buying at $1270 was foolish because the Syria strike is likely not to be followed with more strikes in the near future.

Very Long-Term

For the very long-term, more turmoil in the Middle East is positive for gold.

Please click here for the long-term annotated chart.

Gold And Silver Ratings

The Arora Report precious metal ratings are widely used by bullion dealers, jewelers and investors across the globe.

The first cut of ratings on gold and silver at The Arora Report is generated by complex algorithms that automatically change with market conditions. Then human judgement is added before publication.  Inputs to our algorithms include relationship between currencies, interest rates, sentiment, money supply, global geopolitical picture, global GDP growth, inflation in key countries, leading indicators of inflation, risk appetite, mine production and jeweler demand, smart money actions, speculator actions, and our proprietary technical indicators.

Here are our current ratings that take into account not only the rewards but also the risks. The goal of every investor ought to be to generate high risk adjusted returns, i.e., returns in excess of those commensurate with the risk taken.  These ratings are designed to produce higher risk adjusted returns.  In our over 30 years in the markets, one of the biggest and most common mistakes we have seen investors make is to ignore risk.

  • Mild Positive in the very, very short-term.
  • Mild Negative in the very short-term.
  • Mild Positive in the short-term.
  • Mild Positive in the medium-term.
  • Mild Negative in the long-term.
  • Positive in the very long-term.

These ratings are reviewed daily and changed frequently to help both long-term investors and short-term traders.  For definitions of time frames, please click here.

Full Disclosure: Subscribers to The Arora Report are provided precise buy zones and sell zones as appropriate.  Further, subscribers to The Arora Report may undertake short-term trading positions in addition to the very long-term generational opportunities.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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