Make Kitco Your Homepage

Equities Hammered, But Gold Lower; That Can't Be Right

Commentaries & Views

Editor's Note: Get caught up in minutes with our speedy summary of today's must-read news stories and expert opinions that moved the precious metals and financial markets. Sign up here!

Another Monday morning beatdown for equities is taking place. This has become almost a daily occurrence; markets get hammered early and spend the rest of the day trying to come back, leaving the bulls with hope. This is the same pattern that occurs over and over again when a market tops.

At the same time, gold is under pressure and threatening to break below the $1,280 level once again. Many think that the pressure in equities would be good for gold, which of course is wrong. Gold is not a hedge against equities; it’s a hard asset that is in trouble of breaking down.

I can hear the chants of the pundits and gold longs -- “that can’t be right”; how can gold continue to go lower? The answer is simple. The gold pattern suggests lower prices and market correlations are not absolute at the time they happen. If gold breaks through $1,280 on the downside, the odds increase of seeing $1,220-$1,240.

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.