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Gold Should Bounce

Commentaries & Views

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.

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.