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Gold Sleeps As Equities Rally

Commentaries & Views

Gold and silver continue in sleepy trade as the equities continue to rally. The pattern in the metals is quiet consolidation, hovering near the recent lows. Volume has been light and volatility nonexistent; however, the metals appear to be preparing for a big move.

The sellers appear to be exhausted since taking gold from $1,365 to $1,280. Typically trading action like this will lead to a much bigger move in the very near future. Gold is consolidating on the bottom end of the range while the Dow and S&P churn at the top end.

We expect a move of 5% or more based on the current pattern; that move can go either way. Our expectations are that the lows are in and the move is up. The risk-reward favors the upside as well, assuming the lows are in.

The most important thing to remember when trading and investing is to make sure you know where the exit is. We will exit long positions if the metals take out the recent lows. Until then, we look for a move higher.

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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