That's Just Gold

Another ordinary day in the Gold market with the price falling from high to low more just about $40. Today being the worst day for Gold since December of 2013. I can come up with various reasons for the plunge but the truth is, days like this are normal when trading in Gold and with my experience, I have come to expect this to happen. This is why I always say you must be quick and nimble when trading in these markets, you must be ready to pull the trigger on your trades. Take a look at this move in Gold.

I love Gold and personally think it is going to be much higher at a later date, but I do know that when I exit a long position in the Gold market, odds are, I will be able to buy it back at a better price. I have been trading Gold since 2003, when it was trading below $300 an ounce, days like today will never cease to amaze me. The past couple of years have been very good for those have have sold Gold for a profit. I would like to help those who have only been trading Gold for the past couple of years, the newcomers. I see many traders imply that Gold has to go down on days when it is showing strength. What has worked for you in the past, can make you broke real quick, no matter how much money you have in your trading account. I am saying this only because I have seen Gold go up more than $200 at a time while only dipping $10 to the downside within a 2 week period. If you are going to take a position, know your risk and use stops. Another helpful hint, DO NOT add to a losing position, you just may live to trade another day! These are unprecedented times with the global financial markets, any of these markets can go to extremes at any time and keep going in one direction a lot longer than one might think.

Anyway, where do we go from here? Let's see if we can stay above $1300 through tomorrow. We have Janet Yellen testifying before Congress Tuesday morning here in the US. Maybe the markets are thinking she will have a change of heart and become more hawkish about raising interest rates? In my opinion, she is not touching rates any time soon. She would have to give a definitive timeline on interest rate hikes and I just do not think anyone is ready to do just that! If that were the case, we would most likely see the US Dollar rally and the US Bond markets take a hit from such lofty levels. Again, I just do not see it but I know I could be dead wrong!

Back to Gold and what to watch. If we lose the $1300 level, 1280 will become more important as far as support is concerned. On the upside, we would like to see 1330 recaptured to get the momentum back to take us higher.

The Dow Jones had a daily breakout back above the 17000 level on Monday and Oil tested 100.25 but finished the day on a strong note by closing on the highs of day around $101. The currency markets are awaiting Janet Yellen. Tuesday should be eventful to say the least!

Be careful out there.
Thanks for reading
TraderMartin