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Gold is falling and can't get up

Commentaries & Views

The interesting thing about markets: just when you think you have figured them out, they do the opposite. Just six trading days ago, the precious metals looked ready to run; we reversed our silver position to long. Since the peak on Aug. 12, the metals have closed lower every day.

Therefore, the price action is important. It gives you a better handle on markets and stops you from chasing the news cycle. There are many reasons that gold, silver, and platinum should be rallying, but they are not. The price action told us that there is no hurry to be a buyer.

Markets have many factors that make them move, but one that is never important is the news cycle. Any news that would drive markets is always priced in before you see it. The flow of information is well ahead of reported news. Do yourself a favor, quit guessing or trying to outsmart the market and let price be your guide.

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.