Gold's Natural bounce from support
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
The FED has spoken; they didn't say much, but it was enough to create a selloff in gold. This morning gold is seeing a sharp rally from a major support level. That does not change the downtrend and it gives us a chance to add to short trading positions.
Silver is reversing this morning to the short side and probably won't find support until $24.5. Although long-term we like gold, silver, and platinum but the trends are now bearish. You must remember that trading is a short-term solution and can reverse at any time.
When trading, we don't get emotionally involved with any position. We are long or short when the pattern suggests which side of the market we should be on. For now, the correct side is short and will remain there until the metals find a bottom.
The bottoms and buy points will come when they come. All we can watch is the price action and the levels; nothing else matters when trading. Buying bottoms or selling tops is a fool's game. Participating in the path of least resistance is the only to benefit from trading.
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.
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