Why won't gold and silver rally?
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
The world wants to know why gold and silver won’t rally? The simple answer is that the sellers are the strong hands dominating the buyers. This is classic action in any market. Buyers and sellers rotate, fighting for control. There isn’t a more complex answer, the sellers are in charge in silver, and the buyers are in charge in gold.
However, as we take a closer look at gold, although the trend is higher, we are watching a market in consolidation. This is the time of greatest uncertainty where the strong hands rotate between buyers and sellers. Consolidation is a pain and can last longer than anyone expects.
The good news for gold, silver and platinum bulls is that the markets are building a strong base. This would indicate a big rally is brewing. The only question is when. The when can only be determined by the price action and not by the news. The economics are already priced in. Do yourself a favor and watch the price action, not the pundits.
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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