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A Weak Rally For Gold

Commentaries & Views

Yesterday we wrote that gold has had trouble holding a rally and Tuesday proved our point. Although gold rallied about $6, the rally was weak and not convincing. If gold was strong, the rally should have been stronger, but all it really did was hover around the bottom end of the range.

With all of the turmoil and the equities experiencing a turnaround Tuesday, I would have expected a better rally out of gold. However, on the positive side, gold could be making a rounding bottom from the lower end of the range and may have put the lows in.

It’s not a final score and there are still concerns about gold, but there is some positive price action, giving hope that the bottoms may be in. We are still observing, we are still cautious, but if gold can hold for the next few days at these levels, we will consider the metal to be at a near-term bottom.

Keep those stops tight.

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