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Equity Rally Continues; Gold Fails To Break Out

Commentaries & Views

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.

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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