Gold and Silver from breaking out to ugly
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Late last week, gold and silver looked like they could breakout to the upside, but they failed. Looking at the price action over the weekend, the precious metals could be breaking down again, headed towards the recent lows.
We remain short and look for a test of $1,800 for gold and $21 for silver. This is a very crucial time not only for precious metals but equities and other key asset classes. As we have witnessed over the past couple of weeks, light volume can change sentiment. The odds are that the precious metals test their lows before finding any traction.
The entire market structure has problems; inflation is skyrocketing much faster than the government and the FED will admit. There is no sign that they have a fix which we already knew. Eventually, this should work in favor of gold and silver. Until then, we will stay short paper gold and silver.
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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