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Will Today's Gold Rally Hold?

Commentaries & Views

Gold and silver are attempting to rally this morning. Can they build on the rally or fail, as it seems they do every day? The first thing to look at is the pattern. The metals have been a disaster for months and every rally has failed. I don’t expect this time to be different.

As it stands now, unless you are bottom fishing or trying to catch a falling knife, expectations are that the rally will fail. Until gold can sustain a rally over $1,240 for a couple of days, we would be looking for a breakdown to $1,180.

Over the next three days are some major news events that can create big movement in the metals in either direction. On Thursday, the ECB and Super Mario will make their decision on interest rates, which could be a driver in either direction. Friday is U.S. GDP, which can also create a big move. The best trade here is patience.

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