Crazy Volatility; Gold Remains Under Pressure
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
The equity markets continue their highly volatile trade, as Wednesday saw over a 500-point swing. The VIX index had a 12-point intraday trading range. Oil got clobbered again along with the bonds, gold, euro currency and the Canadian dollar.
The U.S. dollar has bottomed and could be the “black swan’ in the Fed’s grand scheme of things. The dollar was the last chance for the Fed to try and control rates and that is now failing, adding pressure to the metals and other dollar-denominated assets.
Gold continues to struggle and is very close to our first support level of $1,300. The metals did not benefit from the falling dollar but looks very troubled from the stronger one. The picture is clear; the metals should have rallied hard the last few weeks, but they didn't.
One thing that all investors should remember is if an asset class should be going one way and it’s not, that signals a problem, which is usually a sign that a reversal is coming. Look for the metals to keep struggling; however, a dead-cat bounce would be no surprise and probably a selling opportunity.