Crazy Volatility; Gold Remains Under Pressure
The equity markets continue theirhighly volatile trade, as Wednesday saw over a 500-point swing. The VIX indexhad a 12-point intraday trading range. Oil got clobbered again along with thebonds, gold, euro currency and the Canadian dollar.
The U.S. dollar has bottomed andcould be the “black swan’ in the Fed’s grand scheme of things. The dollar wasthe last chance for the Fed to try and control rates and that is now failing,adding pressure to the metals and other dollar-denominated assets.
Gold continues to struggle and isvery close to our first support level of $1,300. The metals did not benefitfrom the falling dollar but looks very troubled from the stronger one. Thepicture is clear; the metals should have rallied hard the last few weeks, butthey didn't.
One thing that all investorsshould remember is if an asset class should be going one way and it’s not, thatsignals a problem, which is usually a sign that a reversal is coming. Look forthe metals to keep struggling; however, a dead-cat bounce would be no surpriseand probably a selling opportunity.
Contributing tokitco.com
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Bubba@bubbatrading.com www.bubbatrading.com/ Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.