Gold's deadcat bounce should be sold
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Gold has been under pressure since early January and is approaching the November lows. However, like all markets, we don't expect gold to go straight down without attempts to reverse direction. This is usually profit taking or a short squeeze. The heavy selling this week should see a bounce back to $1,800 April Gold.
The price action within the markets' phases will show when levels exhaust themselves allowing some pressure to be relieved before the current trend resumes. Since mid-January in gold, the current downtrend has been in place and should continue to take prices to the next levels of support at $1,750 and then $1,700.
While gold has been in a solid downtrend while platinum has been charging higher, making 7-year highs. Silver reversed Tuesday, Feb. 9. While gold looks weak, silver and platinum look strong. The Gold-Silver ratio continues to collapse, which is just another indication of the overall trend.
Remember, this blog is about trading, not investing. I have no doubt that all metals will be much higher someday and we will continue to accumulate physical metals. However, as traders, we are short and will stay short until the trend changes. Do not confuse what you are trying to accomplish.
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