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Gold Rush Is Over For Now

Commentaries & Views

To quote the great Howard Cosell, “it’s over, it’s over,” and that’s what we think about this rally in the metals the last three weeks. To be clear, we are big fans of gold and silver and we are not liquidating our investments, but from a trader’s standpoint, we are going to take a short position somewhere in this $1,315-$1,325 area. 

Gold and silver look exhausted, as if they have just gone 15 rounds with the Fed and simply need a rest. The metals are extremely overbought at these levels and Tuesday’s action, although higher once again, showed exhaustion as the market rallied late on virtually no volume.

The shorts have been squeezed out, new money is still going into equities, and the metals need a rest and will probably test the lows. Investors use the pullback to buy; traders look for a short-term level to sell and capitalize from the next down move.

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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