The pressure is on, gold and silver continue to fail at resistance levels. On Thursday gold and silver rallied, failed, and headed lower again this morning. The metals are on pace to test major support at 1800 gold and 2050 silver. If those levels fail, metals could go much lower.

What I find interesting is the conspiracy theorists are out in force crying precious metals are fixed and manipulated. There are also those who don’t understand why precious metals are moving higher with the massive inflation. The bigger question: if they think a market is rigged, why invest or trade it?

What investors and traders forget, markets price in future events before they happen, gold and silver could be fairly priced at these levels accounting for all the news. When trying to trade correlations, you must remember markets are well ahead of news and today’s price is the fair price where buyers and sellers exchange wealth.

As the equity markets continue to be under pressure many of the commodity markets are getting hammered as well. However, commodities should start to turn, the first push down is related to margin calls and trouble for the overleveraged. After this sell off ends we should see a big rally, we don’t know from where.

Precious metals should be owned on a physical basis with capital that is not needed tomorrow or anytime soon. Trading should be done with paper knowing that we can trade either side without emotions.

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
Stop being a prophet and make profits

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2022-05-16 Monday Night Strategy Call