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Bulls Take The Lead

Commentaries & Views

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.

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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