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Volatility Is Back

Commentaries & Views

The holiday-shortened week has proved one thing, volatility is back, and the markets can actually go up and down. For the last couple of years with the equities going straight up, price volatility was missing in action as witnessed by the collapsing VIX, which made lows in 2017 under 9. That lack of volatility also impacted the metals, especially in the past 30 days as Gold went straight up from the $1,238 lows.

This week Gold has shown the ability to go up and down with big daily price swings between $1,325 and $1,345. The active price action indicates that gold has made a near-term top very similar to equities that also made a top. Remember, just because the indication of a top is here, it is not a green light to start selling.

Trading markets at tops is a little tricky, typically volatility stars to rise in both the VIX index and in more violent price swings. When price volatility starts to get wild it’s important to locate key levels to buy and sell. In Gold the key level to sell is $1,340. If Gold trades $1,340, be prepared to exit at $1,350 if resistances doesn’t hold. The two most important components of any trade are patience and discipline.

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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