Gary Cohn Resigns; Did Gold Know It First?
Editor's Note: Gold and silver has been, at best, a frustrating trade. Exclusive to Kitco News, expert trader, Todd "Bubba" Horwitz, chief market strategist and founder of 'Bubba Trading provides a strategy investors can use in a range-bound gold price environment. Sign up before March 10 for the Kitco News Weekly Rundown newsletter to receive Horwitz's exclusive report and trading strategy.
Gold spiked higher Tuesday, tryingto break above the $1,342 resistance level, but it failed. Tuesday's big rallycame out of nowhere and could have been a simple short squeeze, or did the goldmarkets know something ahead of Gary Cohn's resignation? Markets have a uniqueway of pricing in news before it happens, and that could have been the reasonfor the rally on Tuesday.
Markets hate uncertainty and theresignation changes some of the market dynamics. After spiking a little higheron the news last night, gold is now selling off a little and should resume thepattern it has been in since January -- consolidation working to the lower end.
Even with Tuesday's strong rally,the failure to follow through today is a sign of weakness, indicating gold isfacing headwinds and will probably test $1,300 if not lower. The action in goldis not one of strength but more of a short squeeze in a weak market. Until goldcan take out $1,360, selling rallies is the correct strategy.
Keep those stops tight.
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.