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Gary Cohn Resigns; Did Gold Know It First?

Commentaries & Views

Editor's Note: Gold and silver has been, at best, a frustrating trade. Exclusive to Kitco News, expert trader, Todd "Bubba" Horwitz, chief market strategist and founder of 'Bubba Trading provides a strategy investors can use in a range-bound gold price environment. Sign up before March 10 for the Kitco News Weekly Rundown newsletter to receive Horwitz's exclusive report and trading strategy.

Gold spiked higher Tuesday, trying to break above the $1,342 resistance level, but it failed. Tuesday’s big rally came out of nowhere and could have been a simple short squeeze, or did the gold markets know something ahead of Gary Cohn’s resignation? Markets have a unique way of pricing in news before it happens, and that could have been the reason for the rally on Tuesday.

Markets hate uncertainty and the resignation changes some of the market dynamics. After spiking a little higher on the news last night, gold is now selling off a little and should resume the pattern it has been in since January -- consolidation working to the lower end.

Even with Tuesday’s strong rally, the failure to follow through today is a sign of weakness, indicating gold is facing headwinds and will probably test $1,300 if not lower. The action in gold is not one of strength but more of a short squeeze in a weak market. Until gold can take out $1,360, selling rallies is the correct strategy.

Keep those stops tight.

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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