Gold Sleeps As Equities Rally
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Gold and silver continue in sleepy trade as the equities continue to rally. The pattern in the metals is quiet consolidation, hovering near the recent lows. Volume has been light and volatility nonexistent; however, the metals appear to be preparing for a big move.
The sellers appear to be exhausted since taking gold from $1,365 to $1,280. Typically trading action like this will lead to a much bigger move in the very near future. Gold is consolidating on the bottom end of the range while the Dow and S&P churn at the top end.
We expect a move of 5% or more based on the current pattern; that move can go either way. Our expectations are that the lows are in and the move is up. The risk-reward favors the upside as well, assuming the lows are in.
The most important thing to remember when trading and investing is to make sure you know where the exit is. We will exit long positions if the metals take out the recent lows. Until then, we look for a move higher.