Dead-Cat Bounce Or Has Gold Rally Begun?
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
On Monday, gold reversed smartly from the lows of the day to close higher. The rally brings about the question -- was the move on Monday a dead-cat bounce or has the rally begun? Based on the trade and where gold is now, a case can be made for either.
If you are in the dead-cat-bounce group, the bounce from oversold conditions makes sense, with gold being under selling pressure for weeks. A relief rally would be no surprise and new money can come in and continue to sell the metal, assuming the downtrend would continue
However, if you are in the bull camp, gold came right down to our $1,280 level and this should be the bottom for the move. Gold has been bullied by the strong dollar, interest rates and rallying equities but appears to have put in a bottom. The $1,280 level should hold and the rally should be on, with only a small chance to see $1,260.