Bulls Take The Lead
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Bears thought they had control of the gold markets on Tuesday, taking the precious metal down over $10 before a late-day rally cut those losses in half. In overnight trading, the bears were once again in control until 1:30 a.m. EST. Out of nowhere, the bulls showed up and gold rallied $18 from the lows, putting in a new three-month high.
Once again, the bears got run over by the bulls on heavy volume. In baseball, they call it the squeeze play. You can hear the bears worldwide squealing, wondering how they could get it wrong again. Is this just another short squeeze or are the metals ready to break out to new levels?
Based on the volume and size of the move, a short squeeze is more likely, which could be creating a great selling opportunity. As long as gold stays under $1,330, we would expect this to be just another short-term opportunity to sell. Rallies that come from short squeezes look so good and, in most cases, are just another opportunity to sell.