Gold Should Bounce
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Although the recent pattern in gold has become ugly, there should be a dead-cat bounce in the metal in the next couple of days. Gold has been in a consolidation pattern for months and once again the metal is coming down to the bottom end, which suggests a bounce.
Even if gold headed lower, which is expected, a healthy bounce to $1,330-$1,340 is in the cards. Gold has become very oversold the last four to five days, falling about 3% since hitting $1,360. The bounce should come from between $1,310-$1,315 and should be a fast, vicious rally that will come out of nowhere.
Silver is trading midrange, holding support above its most recent breakout level. Look for silver to remain strong and bounce with gold. We still like the long-silver, short-gold trade and will look to take advantage of the expected bounce in gold.