Gold And The Three Bears
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
(Kitco News) - We have all heard the story of Goldilocks and the Three Bears. Certainly gold has been in a bear market. As we search for a reason to buy, gold appears to have some more room to the downside. However, this doesn’t mean we can’t find a reason to buy for a trade and capitalize on a short-term pop.
For weeks, every rally has failed and been a selling opportunity. We don’t see that changing anytime soon with gold being in a downtrend. From a trader’s standpoint, this week could prove to be an opportunity to see a small rally. This week is the Fed meeting, which could propel prices higher on a reaction to the Fed statement. The jobs number is this week, which could also provide a bounce, but we would consider these rallies if they come too hot and be sellers.
We consider the $1,180 to be just right for now and although we are looking for a dead-cat bounce as traders, as investors, we will continue to observe. For us to want to invest, gold must break this downtrend and we would rather buy at higher prices with confirmation than bottom fish and get run over. Patience is the name of the investing game. It’s always better to wish you were in a trade than you weren’t.