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Gold Rush Or Gold Collapse?

Commentaries & Views

All markets leave a footprint; whether traders and investors want to believe them is another story. The money flow and direction of markets has more to do with money flow than it does the news and fundamentals. The problem is simple -- traders and investors can’t keep their emotions or opinions out of the equation.

Gold is at a critical point in the most recent cycle. We continued to read the footprint on the rally to $1,365, continually warning that a break to the downside was inevitable. Bang -- gold falls hard to $1,281 and is now settling between $1,280 and $1,310.

Does gold see a rush to the upside or a collapse to the downside? This answer is not so simple, since gold is still in position to go either way. If it breaks out to the upside, it must go through $1,310 and hold above for a couple of days. If it breaks to the downside, a close and hold below $1,280 is the key.

For now, the footprints are walking in circles and any trade from here is a guess. We must let the consolidation pattern resolve itself before committing to a directional trade or be committed.

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.

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