FOMC pushes gold and silver to resistance
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Wednesday’s FOMC meeting and announcement came as expected. Equities and metals soared higher, taking both to key resistance levels. This morning both are selling off and dip buyers will be ready to charge in, chasing up this rally. Hold on sparky, take a deep breath and look at the action before blindly following.
The rally in gold, silver and equities was expected, but the negative patterns have not shifted yet, meaning these rallies should be sold until further notice. The technical and fundamental indicators suggest the selling has just begun and has not ended.
Traders and investors suffer from the fatal flaw of FOMO, making them chase markets up or down regardless of the price action. Emotional or opinionated trading almost always leads to failure. These types of reactions allow those that are calm and understand taking losses when wrong to make the best trades over time.
We remain short gold and silver and are willing to sell more against $1900 gold, and $23.50 silver. We are only playing a probability model without emotion, in other words, cold-blooded profit seekers. Emotions have no place in investing or trading. Everything in life is based on probability.
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 months. 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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