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

What the "Fibs" Show for Gold

July 10, 2020 - (Gold Market Wire) - A look at Gold's Fibonacci retracement levels show the importance of the $1744-47 band that has had such an important role in the recent rally to $1800 and above. It has also showed the importance in identifying a short-term top, and why we need to keep an eye on the 50% retracement as a place that could offer us a decent entry point - if, in fact, we get there.

the 50% retracement is right where the gap was - and defined the recent high

Gold and the "Fibs". Sometimes they are your best friend.

As anyone with experience in the markets will tell you - 'nothing goes up in a straight line'. But the belief that you are going to "miss out" causes amateurs to chase strength with margin and get whipsawed...then stopped out and pushed to the sidelines...only to watch the rally they "predicted" happen while they are on the sidelines nursing their wounds. The lesson, as always, is one of patience - and identifying proper entry points. That's why we suggest buying the move back down yesterday only lightly. We like waiting while for a potential move down towards the 50% retracement level featured in our chart.

The key to trading Gold is buying draw downs with increasing ammunition expended with the move, while managing any margin with humility, and saving it for the very last salvos of the draw backs and not the first. Firing out capital at the first sign of retracement is always the hallmark of the amateur. If Gold goes to $2200 tomorrow - highly doubtful - your core position will have to keep you company. But loading the boat on a 10 dollar retracement after a 13-month 40%+ appreciating is an errand for the foolhardy.

Let the market come to you and have a strategy for when it does, and then execute with ice water running in your veins. There is no other way. Emotions will kill your trading book.

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