With the FOMC meeting this week we should see an increase in interest rates which is the only way to slow inflation which is much higher than reported. When you exclude the two highest costs for families, food, and energy you end up with a false read on inflation.
An interest rate hike should initially be bearish for Gold, Silver and Platinum. Combine that with a lower trend and the metals could have a meltdown. We know the trend is lower, we know that high interest rates typically take money from Gold, but we also know that is usually short term.
Although we are short Gold and Silver as a trade using the futures, we are long term physical buyers. The price action has been ugly the past few weeks, every rally has been another selling opportunity. Remember what your objectives are and let price dictate your next move.
Until the trend changes, Gold, Silver and Platinum are headed south. Great opportunity exists for those who can separate opinion from fact. Too many are so opinionated they can’t see the trend through their opinions. We are short and will be until the trend changes, it’s that simple.
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
Stop being a prophet and make profits
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