Just when you thought it was safe to be Long Gold
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
After gold had been on a four-day winning streak, taking the yellow metal to the brink of a reversal to the long side, we saw a failure. After Thursday’s CPI number, which was hot, gold, silver and platinum initially rallied before selling off.
This morning the selling pressure continues. It appears that gold is headed back to the magic level of $1,800, silver to $22, and platinum $1,000. In other words, the metals are still weak, and the recent rally was nothing more than a short-covering rally.
We all know that there will be a day when the metals reverse to the long side and we will see a big rally, just not today. We must remember the most important thing to remember when trading markets, price is king. Until further notice, we are short gold and silver.
Precious metals should be owned physically with capital that is not needed tomorrow or anytime soon. Trading should be done with paper, knowing that we can trade either side without emotions.
In all markets, price action determines what will happen in the next day, week, or month. 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.
Join me Monday, Feb. 14 for our Monday Night Strategy call at 4:30 EST