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Contributed Commentaries

Is this the bottom?

Jonathan Da Silva

Kitco Commentaries | Opinions, Ideas and Markets Talk

Featuring views and opinions written by market professionals, not staff journalists.

Commentaries & Views

As suggested yesterday, metals are bouncing out of oversold conditions this morning. Overhead resistance will be in the $1,960-$1,965 range for gold. Silver has held up better than gold during the recent selloff and is also seeing a bounce this morning. Resistance is now likely in the $25.90 area. Platinum bulls have the metal trading at $1,020 as of this writing and are looking to get the price back over $1,035. Palladium bulls may finally be in for some short-term relief with the metal looking to carve out what seems like a temporary bottom.

The price action over the last few weeks is likely no surprise to seasoned investors and the long-term bull case for precious metals remains intact. However, participants should continue to be aware of the possibility that the current bounce is a counter move, in the beginnings of a downward sideways consolidation, that could last longer than expected; with the recent run-up, recency bias becomes a risk in the decision-making process.

Another example of recency bias may be observed in the stock market, where the short-term trend has been to sell all rallies. After months of downward sideways action, the bias will be to expect further selling in equities. Volatility will likely persist; contrarians in the equity space may see that persistent pessimism as a sign that a bottom is near.

Thanks and have a nice day,

By Jonathan Da Silva

Contributing to kitco.com

Contact jdasilva@kitco.com
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.