Although equities got hammered on Monday, Gold and Silver hung around the unchanged level. Both attempted to rally and sell off before settling near flat. Platinum reversed Friday’s big rally with an equally big sell off on Monday.

The metals markets remain quiet, trading on thin volume. This kind of action lacks liquidity and creates bigger artificial moves in either direction. We remain short Gold, Silver and Platinum and expect the selling to continue. Resistance has fallen across the board supporting our position.

One takeaway from the general market action and what caused the big sell off in equities was more about the hike in margin rates that rose about 20%. This forced liquidation in many smaller accounts. The election is a week away and promises to have illiquid, big move markets over the next couple of days.

One thing to remember about all markets, lack of liquidity creates bigger, faster moves on light volume.

Todd Horwitz Chief Strategist
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