Gold's Death Spiral
Tuesday saw gold make a nicerebound from yet another down day and close higher on the day. Today with theFOMC announcing a decision on interest rates, gold has found its way lower onceagain.
Between today and Friday, thereare two big news items that can change the course of the gold death spiral -- today'sFOMC meeting and Friday's jobs report. The numbers by themselves aremeaningless. The key is what the market is expecting.
Traders and investors have a badhabit of trying to trade the news, not realizing the news is priced in and theyshould be trading on the reaction. Remember, in today's world, news moves atthe speed of sound and the big banks pay millions to get that news first. Bythe time we see the news, it's old.
Gold will move on the news fromthe FOMC today and again from the jobs number on Friday. The question is whichway. The news itself is worthless but the reaction is priceless. If gold popshigher on the news, that would indicate more downside action remains; a sell-offto $1,180 could signal a bottom. Be ready to react to the news, not predict it.
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.