Make Kitco Your Homepage

Metals Defy Odds, Continue To Push Higher; Beware

Commentaries & Views

Something tells me there are some underlying problems in the equity markets based on the way that gold is trading. Gold and silver, which had major breakdowns three weeks ago, have gone up almost every day since. We had turned short-term bearish while maintaining our long-term bullish posture. That positioning has not worked out well and has been rather painful, with gold rallying about $90 from the bottom, pushing through the key level of $1,265. 

The action in gold signals that there is a problem beneath the surface of the markets. On Wednesday, gold was under pressure after the Fed minutes and out of nowhere a rally came and recouped all loses. The Wednesday night-Thursday morning trade saw gold take out the lows of Wednesday only to bounce back again; Thursday at 2 EST, gold exploded to $1,327 but sold off.

Taking in the whole picture, we remain short-term bearish for many reasons. If there are underlying problems in the markets, they have now been priced in, and if there is not, a sell-off is near. We expect a test of the recent lows, and that sell-off will come out of nowhere. Markets never announce themselves. Just be prepared for anything.

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.

Precious Metal Charts

Follow Kitco News

Kitco Offers