Gold Rush Blow off Pattern
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
The runaway in gold rolls on; the breakout to the upside continues. This action as bullish as it looks is starting to look like a blow off to the upside. Suddenly price and time have become irrelevant and nothing is holding back the buyers.
We have been bullish on gold since early June and are still positive on the yellow metal. However, this action suggests that a near term top is coming. There is no way to tell exactly when the rally will end but the price action now is more of fear and greed which typically signals the end is near on this leg up.
We are not predicting a top nor are we liquidating our longs. However, we do see reasons for concern as the bond bubble grows, the currency wars intensify, and buyers have now fear. Silver has been moving higher but is now starting to mimic gold and is accelerating too quickly. We understand that prices can continue to rise but are now concerned that a pullback is near.