Welcome To March; Will Gold Catch A Bid?
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Gold and equities continue their tandem trade, as both are experiencing some heavy selling pressure. Wednesday saw the equities get hammered, and gold and oil reverse and go lower. Everything tried to rally but as expected failed, indicating the underlying pressure in equities and the lack of real buying interest in the metals.
Most markets are somewhat range-bound and are working their way lower. The action is consistent with market tops. There should be a bounce soon from the bottom end of the consolidation ranges, and we will look for a spot to sell. Gold looks destined to test the $1,300 level and possibly lower. The $1,240 level is a possibility.
We are in a sell-the-rally mode, meaning all rallies that reach the upper end of the range should be sold until the markets can break out above those levels. Equities, gold and oil all look weak, but a short-term bounce from around these levels would be no surprise. We will remain sellers until a rally can take us above $1,365 in gold, 26,000 in equities and $67 in oil.
Keep those stops tight.