News, analysis and commentary for gold traders and investors

"Be Right - Sit Tight"

Jesse Livermore
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Gold Market Wire... Gold Market Wire... Gold Market Wire
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Gold Market Wire

News, analysis and commentary for gold traders and investors

The Long View

Can Gold Rally Survive the Passing of the Corona Virus?

March 10, 2020 - (Gold Market Wire) - Just when it was safe to panic, two Corona Virus hot spots, South Korea and Wuhan, China (aka 'patient zero') have started to slowly sound the all-clear. Equities are rallying and Gold looks under some small pressure.

Of course, the mayhem in Europe and America will persist, as their lumbering political machinery figures out how to score cheap political points - desecrating Trump in the USA and singing the praises of the EU in Europe - while revving up the machinery for the printing press and even more - negative interest rates. One can rest assured that there will, of course, be the creation of yet more special committees to examine something that may have already peaked. And people wonder why the west fares so poorly these days.

But what of Gold?

Gold has taken on about $150 of upside action since Corona Virus really came into the market. Those who got in late may be getting nervous. Those on margin could "bricking it" to use the London trader slang.

If one takes the view that equities were ripe for a correction and that Corona Virus just amplified and shortened in time a move that would have happened anyway, then maybe Gold should sell off. Corona certainly brought volume into the market, and a lot of non-commercials specs got long in the past week. That would make it a good time to mete out the punishment and force everyone to relinquish their speculative length. The Gold market absolutely loves doing that. Which is where General Jim's maxim "never chase strength in Gold" comes from.

Perhaps a time to flatten the book and sit on the sidelines?

Today's close should give us a good read.

You don't always have to have a trading position in Gold. Sometimes the sideline is the smart trade.

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