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Breakout - We Are Wrong

Commentaries & Views

There are times when the markets do the unthinkable, and this is one of those times. Gold is now breaking out again to the upside, adding on to the rally that began Dec. 12. Our long-term views on gold were bullish. We called the end of the bear market in metals but thought we would see a retracement and could profit from the short side. We were wrong!

Gold has broken out to the upside and now brings the highs into place at $1,362. We are not buyers here but will take our losses on the short positions we had set up trying to benefit for the pullback that never came. Our long-term ownership in the physical metals is in great shape, but we will close and lick our wounds here and wait to see if gold can reach the highs.

This is what makes good traders -- recognizing they are wrong, taking the losses and moving on to the next trade. We are still slightly bearish in the short term but will not fight the tape now. With all of the central bank manipulation and weak dollar, we will move our trading to the sidelines and observe.

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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