Gold and silver exploding
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(Kitco News) - Overnight, there were a couple of geopolitical events, including an airstrike in Iran taking out one of the most powerful generals in Iran’s Quds Force. This was a big hit for the U.S. as we took down another powerful leader that hates the U.S.
This event caused gold, silver and crude to soar higher after big days yesterday. We had expected the metals to consolidate some before exploding higher, but with the geopolitical events, the explosion happened sooner.
We wrote yesterday that we were long and looking for a test of the recent highs; we just didn’t expect it today. The pattern being created by the overnight action is known as a blow-off pattern. Although we remain bullish and expect new highs, we expect a reasonable sell off in the next couple of days.
Fear trades that create this blow-off pattern almost always end up in a reversal pattern, which should take gold back to Thursday’s closing. However, that doesn’t mean it will happen today or Monday. We will remain long but are looking for a spot to sell for a day trade to resolve this blow-off pattern.