Gold Setting Up For Big Move
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
The metals are setting up for a big move that could go either way, although we believe they will break out to the upside. The trading range is getting tighter and tighter, which only indicates a huge move is on the horizon.
When markets start to compress and their trading ranges continue to narrow, all signs point to a big move. This is exactly the pattern that we have seen in the metals as the daily ranges become untradeable.
Eventually gold will break out of this range. There could be a continuation of the downtrend or a breakout to the upside. The risk-reward model suggests that the breakout will be to the upside, which is what we think. There are too many short positions out there, and we expect the next rally to start with a short squeeze.