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Markets Are Crazy; Gold Trying To Break Out To Upside

Commentaries & Views

The equity markets have been as crazy as I have seen since the Internet bubble of the 1990s with one major difference -- they never go down. The craze was wild in both directions; stocks always ended up higher but had major swings of 3% to 5%. Today’s market has not seen a down move of 3% in two years, which is the longest such period in history.

For the last month, the gold market has been acting like equities, going up almost every day, and all selloffs have been met with plenty of buyers. Every dip has been met with buyers since the lows were made at $1,238 on Dec. 12. The rally has been incredible and like equities, killing the gold bears.

The breakdown on a weekly basis could come to a head today. We have written that $1,330 is the key level on a weekly basis and this morning gold reached $1,333 before failing. As of this writing, at 8:53 EST, gold was trading at $1,326.90, giving up half of the gains. It’s going to be a volatile day; it all comes down to the closing price of $1,330. My guess is it fails and gold heads lower, but I will be prepared to stop out on a close higher than $1,330.

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