After Gold had been on a four-day winning streak, taking the yellow metal to the brink of a reversal to long, we saw failure. After Thursday’s CPI number, which was hot, Gold, Silver and Platinum initially rallied before selling off.
This morning the selling pressure continues, and it appears that Gold is headed back to the magic level of 1800, Silver 22, and Platinum 1000. In other words, the metals are still weak, and the recent rally was nothing more than a short covering rally.
We all know that there will be a day when the metals reverse to the long side and we will see a big rally, just not today. We must remember, the most important thing to remember when trading markets, price is king. Until further notice, we are short Gold and Silver.
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 BubbaTrading.com
Stop being a prophet and make profits
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