Gold Market Wire
News, analysis and commentary for gold traders and investors
Gold Market Opening
Gold's Symmetrical Triangle Narrowing
May 8, 2020 - (Gold Market Wire) - The symmetrical triangle we identified turned out to be the correct formation and one need look no further than yesterday's candlestick formation on the chart.
Today we start at the high and as the 'triangle' runs out of room gold will have to make a break - one way or the other.
Both trend lines have worked like a dream. Never let it be said that the Gold market doesn't follow its trend lines! It's not always the case, and indicators change and shift, but when you can identify it in operation, it certainly helps with trading.
Our past two sell offs have been bought back very quickly, but we still must resist the desire to chase strength. Draw downs should be bought now. Gold is establishing a new pattern at this juncture, either a move higher, or a pull back to move higher. The market looks strong now, and even if we head back down, there are buyers waiting.
On a side note: a serious eye must be kept on silver to identify an entry point. When it moves, it will likely move strongly ... like Gold on steroids. Silver has been battered, bruised, beat-up and shunned. But its day is soon coming and it is a rally you will not want to miss. Our opinion here is that Silver is far more difficult to trade than Gold, because of its volatility, but it should be held and sold on vertical rallies and bough back on the drops which make everyone capitulate. Its a roller coaster ride from hell being in silver, but establishing positions at levels like these - and adding more to the position on pullbacks, will give great chances for profits over the next two years. If you use margin in silver you will be killed - without a doubt, so you must use cash. Silver is like a high Scoville rated Chili Sauce - - a little goes a long way. So size the position properly, which means small. And leave some cash to buy on a big sell off to add to the position.
We are entering interesting times for the precious metals markets.