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Gold and silver trade like all markets

Commentaries & Views

Too many people get involved with markets on a tick-by-tick basis. Watching markets minute to minute, tick by tick, is the number one reason for failure among traders. I get too many emails telling me that I’m wrong;  markets are manipulated or gold, silver and platinum can only go up.

If we look at each item on its own, market manipulation certainly happens, but it doesn’t matter. Manipulated or not, there must be a buyer and a seller to complete a trade. In other words, worrying about manipulation is a waste of time and energy. Metals don’t always go up. Traders can make money on both sides of the market by playing the trend. Too many forget that a trade and investment are different. I can be bullish long-term but bearish over the next day, week, or month. There is no direct correlation.

For months we have been short silver and have made a lot of money on the short side. Eventually, the trend will reverse, and we will be long, but not today. Gold has been a little choppier; we were short, then long for a few days and now we are short again. Based on the trend, we expect gold and silver to join platinum and take out the flash-crash lows. If we are wrong, we will reverse.

You can buy physical metals anytime if you have a long-term perspective and are not leveraging a position with investment capital. When investing, you can never be in a position to be forced out of the market. Investors should quit worrying about the day-to-day action because you are not selling anyway. The conspiracy theorists are clueless about markets in general. Price is all that matters.

In all markets, price action determines what will happen in the next day, week or months. Keep the two strategies separate. The worst trade anyone can make is turning a trade into an investment hoping for a way out. Traders must learn to take their losses and move on to the next trade.

Patience, discipline, and money management always win the day. Let the map of the markets show you the way.

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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.