What's Wrong With This Picture?
Even afterwatching markets for 38 years, you always have to ask the question: “what’swrong with this picture.” The equity markets are under extreme pressure and outof nowhere volatility is through the roof. The VIX rallied 100% on Monday andis up 400% from its lows. Interest rates are at 5-year highs and yet gold hasdone nothing
From the movieTrading Places when the Duke Brothers were trying to corner the Frozen OrangeJuice markets, Mortimer says to Randolph “That can’t be Right” how can pricesbe going down. This is the same way I feel about gold.
On Monday whenthe Dow was down 1500 points, gold was still lower, the although it did rallyby the end of the day. Looking at all the factors: the weakest dollar in 5years, full blown panic in the markets and treasury bonds spiking higher, whywas gold stagnant? The answer can only be that it wants to go lower. Thetechnicals support a move lower in gold; until the market can break out over1362, we will stay on the short side as traders.
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.