Dead-Cat Bounce Or Start Of Rally?
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Federal Reserve policymakers Wednesday pulled off an illusion that has Harry Houdini rolling over in his grave. They managed to pretend to raise rates while keeping massive pressure on the dollar. The move was a zero-sum game for global interest rates, meaning that if you are a foreign borrower, because of the weakness in the dollar, your interest rates stayed the same.
Gold loved the news and rallied over $20 on Wednesday. Silver and copper joined the party as well, loving the weaker dollar. The real question is -- was that rally a dead-cat bounce from oversold conditions? Is this the start of the next leg up?
Nothing on Wednesday changed the patterns that the metals are in. Gold is still in the same range and until it breaks out over $1,365, the trend is lower. With Wednesday’s big rally, gold managed to make another lower high, which is not bullish. We will continue to observe the metals and sell at resistance until the top end of the range is violated