Gold Runs Over 6-Year Highs And Reverses
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
As we wrote on Tuesday, it looked like the final blow-off for gold in the recent move. Not only did gold rally big and make over six-year highs but finished with the worst pattern of all -- a key reversal. It made new highs and closed on the low of the day.
The key reversal usually indicates a market is getting ready to turn, in this case lower. We are not hitting the panic button or suggesting that the rally is over and gold is going way down. This is a pattern we are happy with; it should help gold trade down to $1,380-$1,390, which is where we would like to add on.
Gold is lower overnight. We expect this selling pressure to continue, as the rally was too far and too fast. To be clear, $1,500 is in play and we are looking for higher prices; however, lower should be first and healthier for the next up move. Wait for $1,380-$1,390 to start to buy.