Equity Rally Continues; Gold Fails To Break Out
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
U.S. equities are trying for their sixth consecutive up day, cutting the panic losses in half. This rally is about a phony as one can be, with the fear of missing out driving this market higher. The debt is mounting, as is the U.S. dollar manipulation, which is lending support to some of the commodities, especially gold.
Overnight gold attempted to break out above the recent highs but failed. Gold is on a five-day rally since making a low at $1,309. Expectations are this rally will fail and a test of $1,300 will be next. The current rally appears to be driven by short covering. The only support to this rally is the cheap dollar and the excessive shorts.
Our expectations are for an equity and gold sell-off. The recent lows in both gold and equities are in danger of being violated. This rally should fail, and an acceleration back to the lows is on tap.