Gold And Silver's Trouble With Monogamy
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It was another day of churn for the metals as they trade at the lower end of the ranges, trying to break out one way or the other. As we have said many times, the pattern on congestion is the most challenging for traders because markets like relationships and won’t commit to one side or the other. Both gold and silver have a problem with monogamy right now; they won’t commit to a direction.
With the Fed reporting at 2 p.m. EDT, that could all change and the metals could fall in love, committing to a relationship up or down. The pattern we have now is noncommittal but depending on what the Fed says or does and the words used, gold and silver could break out of these ranges. The commitment numbers remain above $1,290 or below $1,280.
Based on the action, it’s hard to say who the lucky one gold will commit to but we will assume down until something changes. The odds and probabilities favor the downside, but the relationship is tenuous at best. Until there is commitment, the best trade is the one of observation.