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Equities, Dollar, Oil And Gold Under pressure

Commentaries & Views

Markets are under pressure -- the equities, dollar, oil and gold are all struggling at these lofty levels. Equities are as overbought as they have been in history, based on the RSI. On a weekly and monthly basis, the RSI has never been higher. This is the first market I can remember which only goes up and hasn’t had two-way trade. Even the famous bubbles of the 1990s and 2008 went up and down.

Gold and other commodities have not benefited from the weakest dollar in years, leading us to the conclusion that the dollar is near a bottom and gold and oil near tops. That’s not to say gold and oil can’t rally a bit in the next day or two; however, we are on the sell side of both and look at the risk-reward model, which indicates more money can be made to the short side.

Until further notice, rallies in equities, gold and oil should be sold. Gold is not a buy until it can breakout over $1,365 and hold. The big rally that started on Dec. 12 has run its course. Commercials are carrying record short positions, which indicates pressure will remain on the metals. Don’t look now but all signs point to a reversal across the board

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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