Metals Defy Odds, Continue To Push Higher; Beware
Something tells me thereare some underlying problems in the equity markets based on the way that goldis trading. Gold and silver, which had major breakdowns three weeks ago, havegone up almost every day since. We had turned short-term bearish whilemaintaining our long-term bullish posture. That positioning has not worked outwell and has been rather painful, with gold rallying about $90 from the bottom,pushing through the key level of $1,265.
The action in gold signalsthat there is a problem beneath the surface of the markets. On Wednesday, goldwas under pressure after the Fed minutes and out of nowhere a rally came andrecouped all loses. The Wednesday night-Thursday morning trade saw gold takeout the lows of Wednesday only to bounce back again; Thursday at 2 EST, goldexploded to $1,327 but sold off.
Taking in the wholepicture, we remain short-term bearish for many reasons. If there are underlyingproblems in the markets, they have now been priced in, and if there is not, asell-off is near. We expect a test of the recent lows, and that sell-off willcome out of nowhere. Markets never announce themselves. Just be prepared foranything.
By Todd 'Bubba' HorwitzContributing tokitco.com
Follow @Bubba_Trading
Bubba@bubbatrading.com www.bubbatrading.com/ 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.