Gold and silver, the yo-yo market
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Gold and silver continue to pretend they are yo-yos as they go up and down, but never leave the range they are in. Eventually, the string will break; the metals will break out with a much bigger move. Does the string break when we are walking the dog or around the world?
Nobody knows the next move in gold and silver; it could be up or down. A trade now can go either way; we are short and will assume lower. We would not be surprised if the breakout was higher. If so, we would take our losses, reverse them, and look for a rally.
Conditions are as tough as they get, which is consistent with consolidation. In the next couple of weeks, no one can guarantee anything. We can only play the trend, which is lower until it's not. If we look years out, we expect prices to be higher. Everything comes down to your time horizon.
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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