Gold and silver should rest and consolidate
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Gold, silver and platinum have had terrific up moves over the past couple of weeks. The parabolic moves on Tuesday should lead to a consolidation and rest period for the next few days, especially if the uptrend is to continue.
From a technical standpoint, the last few days has traveled too far away from the mean. Typically, this type of action leads to a small selloff or a congestion period. The patterns look strong and should lead to new highs in gold, $30 in silver and $1,250 platinum, if not higher.
The most bullish price action from here would be a pullback to support giving us another buying opportunity. Between the fears in the world, plus the geopolitical issues and the underlying strength, we see only higher prices on the horizon. Follow the price action and look to be a buyer on pullbacks to support.
Precious metals should be owned on a physical basis 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.
On Wednesday, I will be presenting a webinar on Options in partnership with Tradier Brokerage and the CBOE. The link to register is below.