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Gold rush or gold crush

Commentaries & Views

Just when it looked safe to get back in the gold waters, the sharks once again ripped the heart out of the gold bulls. Gold’s failure to break above resistance was a warning sign. Last week, we wrote about the key resistance level that gold needed to break through; it failed.

Silver, after breaking out to the upside, has struggled since; however, prices are still above key support, indicating higher prices are coming. Platinum is under pressure again, making a lower high just when it appeared it was ready to run.

We remain short gold, long silver, and would be long platinum if it were liquid enough to trade. There is no way to know where the metals will end today or tomorrow, but the trends are clear, silver and platinum up, gold down. Until they reverse, we are buyers of silver and sellers of gold.

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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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.