Gold Market Wire
News, analysis and commentary for gold traders and investors
Gold Falls Back and Picks Up Again
Corona Virus or no Corona Virus, no market goes vertical and keeps on going. This is the critical difference between "legging higher", "gapping up" (usually followed by backing and filling the gap) and flying straight up. It's important to know the difference.
On the Downside, yes - a market can go into free-fall, hit the pavement and stay there ( the "dead cat bounce") - but rallies have to proceedwith a certain order, even when volitility has been ramping. When they get disorderly, they fall back hard. So... this is what you get..
Which is why, to quote General Jim, you never chase strength in gold.
For those who bought up at 1670+ on margin, riding the emotional wave, the ride down to 1625 has probably either stopped you out, or you've been up all night praying for a huge Corona death toll in China to bail you out of a position you got into in the wrong manner.
Margin is always a tough lesson in the commodity world. Use it at your peril !
That's why we called for profit taking when we started to approach 1680. The market was just too vertical.
Here's the real challenge ahead... the next resistence point.