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Gold Runs Over 6-Year Highs And Reverses

Commentaries & Views

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.

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.

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