Gold fails big test
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
There is an adage on Wall Street and in trading communities: Buy the rumor, sell the news. This is exactly what happened on Wednesday in the metals, especially Gold. Platinum and Silver were also affected but nowhere near the damage done in Gold.
Every trading day brings signs of what may happen next, yesterday we mentioned Gold could reach new highs but also said that there were some potential roadblocks. On Wednesday, we saw the first, Gold reached a major resistance level of $1,966. The failure was deep and ugly; however, it only lasted long enough to test support and hold.
To be clear the action seen on Wednesday was normal and did no damage to the technical pattern of Gold. $1,966 February Futures was known as a double top, which is natural in trading sequences. However, double tops work best in downtrends, which is not the case for Gold. The uptrend is still in play; $ 1,900-$1,910 support should hold as we expect another attempt to take out the recent highs.
Silver and Platinum were not under the same pressure as Gold. All three remain in strong uptrends, and we are long. We remind you of two things, be prepared, not surprised, and trade the news you lose.
Tradier (one of our brokerage partners) is offering a 6 Session Options course starting this Saturday January 9th at Noon est.
2021-01-09 Options Training Session 1