On Monday President Biden reappointed Fed Chair Powell, sent Gold into a nosedive and reversing our long trading position to short today. The selling was sharp, fast, and constant. Silver and Platinum were weak as well but didn’t suffer reversals yet.
Silver and Platinum are under pressure this morning and would reverse tomorrow if the pressure on metals continues. Gold, Silver and Platinum were the first to act to the announcement and started selling hours ahead. Indicating they knew that Powell was going to retain the Chair.
The meaning of the appointment is the best result for the economy and was a slap at the progressives who were fighting for Lael Brainard. However not good news initially for metals with interest rates starting to rise. The chain reaction of events triggered a sell off in equities and the Bond markets.
Although Monday’s sell off was painful and puts our trading position short, we are still big fans and owners of physical metals. Gold, Silver and Platinum will resume a move up after this short term sell off concludes whenever that is. This is where our investment in physical metals and trading of futures are on the opposite side. The good news, we can benefit now on the short side and later on our long physical holdings.
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.