Gold Lacks Energy
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
On Monday, the equity markets were under heavy pressure early, as was the dollar. And where were the metals? They were only slightly higher. Metals continue to be asleep with no energy. With Monday’s fear in equities and a weak dollar, gold could only muster a small rally. With equities down almost 500 points and the euro currency up big and gold on support, the rally was disappointing.
With equities lower this morning again, gold has lost all gains from Monday, which tells you how weak the metals are now. All markets go through these types of patterns -- lackluster, no energy and no buyers. This will change; the only question is when. What will it take for the metals to break out of this range and which way will they go?
Based on the current action, expectations are that gold will break to the downside. If $1,300 fails to hold in gold, $1,240 comes into play. The big event that may finally move gold could be Wednesday’s Fed announcement. We are long-term bullish, but the current action is not. The best trade here is to observe and watch the footprints.
Keep those stops tight