Gold, Silver and Platinum have been under heavy pressure destroying every support level on the way. From a purely technical view of the charts, they have all broken down which brings much lower prices into play. The trend is lower, and we are short the futures maintaining ownership of our physical metals.
Everyone wants to know what happened and why Gold, Silver and Platinum have reversed so quickly. There is no textbook answer however the higher interest rate environment is not bullish for metals which means the reappointment of Chair Powell is not a positive note for the bulls.
The overall economy is in horrible shape; the asset appreciation created in equities is more because of the money printing and increased money supply. In other words, the rally is more of a mirage than based on solid fundamentals. Like all markets the metals have overreacted to news versus understanding the action behind it.
Emotions run high in both sell offs and rallies, this time is no different. Over the next 10 years there is no doubt Gold, Silver and Platinum will be higher than today, however in the next 10 days they could be anywhere. That is the difference in trading and investing but either way emotions lose and create bad decisions.
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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