At the end of last week Gold, Silver and Platinum mounted a strong rally, or did they? With the trend being down we will assume the rally was short covering and not a reversal. You must remember, the biggest rallies come in bear markets which the metals are in.
We know that someday Gold, Silver and Platinum will make new highs however with the lower trend from a trader’s standpoint short is the play. For investors, this may be a good time to start buying some physical metals with funds you are not going to need anytime soon.
There are many warning signs in the equity markets, but the metals remain under pressure. Higher interest rates are coming as is a stronger dollar. Neither is good for Gold and Silver. However, hard asset commodities will find buyers and eventually move higher. Trade them short for now and accumulate physical.
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.
Todd Horwitz Chief Strategist BubbaTrading.com
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