Gold Headed Lower
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
(Kitco News) - Last week’s rally in gold was merely a dead-cat bounce and shows underlying weakness in the metal. The trend is lower, and gold has broken to the downside. Traders can sell rallies until gold can close above $1,330.
The breakdown through the bottom of consolidation indicates gold has some work to do to the downside. We expect a run down to the $1,280 level before there is any sustainable rally. Investors should not worry about daily movement; we are long-term bulls and expect much higher prices when this sell-off resolves itself.
Traders trade on different time frames – with investors in for the long haul -- and the two should never meet. Investors should not worry about daily movement or try to time the markets. Traders are looking for profits based on technical analysis, while investors look at market fundamentals.
Combining trading and investing into one is a recipe for disaster. If you are buying for a long-term investment, ignore the daily movement. If you are trading, take profits when you can and be disciplined enough to take the losses when the pattern changes.