GOLD UPDATE (2:30 pm EST)
The volatile precious metals market seems to be mocking my recent blogs about an imminent correction, but the technical reasons for a correction are still in place, especially the COT (Commission of Traders) charts which are strongly bearish (these charts are almost never wrong). If gold can exceed its high of $1263 (it is very close), it could move considerably higher over the next two weeks before taking its correction. In terms of timing, tomorrow or Monday could be a turning point for a top and reversal. If not, we could see more rallying into the middle of the month and then a significant reversal. I realize that holding a short position here is risky so some traders may wish to cover their short position today with a small (about 1.5%) loss. Others may want to just wait for $1263 - $1265 to break. Holding my short position in gold with a stop loss on a break above $1265 (spot price).
Today's rally in precious metals was triggered by a drop in the U.S. Dollar Index. After rallying strongly over the last few weeks, the dollar turned back from strong resistance around 98.5 this week and is taking an overdue corrective dip. There is support now at 97.5 so that may hold the correction. If not, the dollar could be breaking down again, and this could be bullish for gold and silver prices.
The volatile precious metals market seems to be mocking my recent blogs about an imminent correction, but the technical reasons for a correction are still in place, especially the COT (Commission of Traders) charts which are strongly bearish (these charts are almost never wrong). If gold can exceed its high of $1263 (it is very close), it could move considerably higher over the next two weeks before taking its correction. In terms of timing, tomorrow or Monday could be a turning point for a top and reversal. If not, we could see more rallying into the middle of the month and then a significant reversal. I realize that holding a short position here is risky so some traders may wish to cover their short position today with a small (about 1.5%) loss. Others may want to just wait for $1263 - $1265 to break. Holding my short position in gold with a stop loss on a break above $1265 (spot price).
Today's rally in precious metals was triggered by a drop in the U.S. Dollar Index. After rallying strongly over the last few weeks, the dollar turned back from strong resistance around 98.5 this week and is taking an overdue corrective dip. There is support now at 97.5 so that may hold the correction. If not, the dollar could be breaking down again, and this could be bullish for gold and silver prices.
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