Breakout - We Are Wrong
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
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.