News, analysis and commentary for gold traders and investors

"Be Right - Sit Tight"

Jesse Livermore
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Gold Market Wire

News, analysis and commentary for gold traders and investors

Gold Market Update

Possible Russian Invasion of Ukraine Turns Gold Market

February 14, 2022 - (Gold Market Wire) - Our latest (i.e. third) scalp short from the downtrending line didn't work, as the line gave way and we broke through to the upside. We had to scramble and cover, but the age old discipline to cover quickly (especially on a Friday!) when it goes against you, kept the damage to a minimum. So, over the past fortnight we got two out of three scalps right. The first was hugely profitable, the second did slightly better than the loss-making third... so we netted out well. As we can see, Friday marked out a major change in fortunes for Gold, and since we are never inclined to "marry (any) trade" we owned up quickly to the fact that this time around we got caught offside.

...third time wasn't the charm.

We buried the ego quickly as we moved above the line with confidence, and got out for less than a $10 sting. As it was a scalp, it was sized as one, so a knee scrape was what we got. No point in digging ones heels in, or insisting we are right and the market wrong. Our strategy worked well... and then it didn't. The quick cover stopped a bigger hit. The overall take was still decent money. We acknowledge, as well, that the Gold market may (finally!) be at a turning point. There is certainly enough going on in the world to support that contention - like the total loss of confidence in government.

"On to the next trade" is what we need to focus on, as we are now on the sidelines. Gold is making a come back, no doubt, but we'll need to be cautious about getting back in the market straight away, from the long side. This morning's downdraft has been proof that a mere pivot and go long policy on Friday wasn't the right move.

It's pretty evident that $1860 is going to play a role in the next move, whether as a defended high, or the next break-out point, and in the chart below we can see the horizontal band that surrounds it.

launch pad?

It's not going to take too much to get Gold to move up now. Fortunes reverse quickly, these days, as news headlines seem to drive everything. The market, we must acknowledge, certainly looks strong. While it is true that a major adage of ours is to "never chase strength"... these 'special' times call for special strategies, and we are preparing to put a trading position (not a scalp) of length on, if we move up in the New York opening - as seems likely.

Nothing causes inflation like inflation... and inflation, alongside military spending makes that adage doubly so the case. We must be prepared for a higher market. All we need now, to go along with gargantuan government and personal debt will be military deployment, and, 'presto!' - - Gold will be sharply higher. We are prepared with our core position, and stand ready to execute on a new position. We must avoid the temptation to anticipate the market, so patience is the watchword this morning.

Silver Update:

weekly chart
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