Gold: Rush Is Over For Now
To quote the great Howard Cosell, “it’s over, it’s over,” and that’s what we think about this rally in the metals the last three weeks. To be clear, we are big fans of gold and silver and we are not liquidating our investments, but from a trader’s standpoint, we are going to take a short position somewhere in this $1,315-$1,325 area.
Gold and silver look exhausted, as if they have just gone 15 rounds with the Fed and simply need a rest. The metals are extremely overbought at these levels and Tuesday’s action, although higher once again, showed exhaustion as the market rallied late on virtually no volume.
The shorts have been squeezed out, new money is still going into equities, and the metals need a rest and will probably test the lows. Investors use the pullback to buy; traders look for a short-term level to sell and capitalize from the next down move.
Todd 'Bubba' Horwitz
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