Gold Rally Rolls on, Silver Trying to catch up – By Todd Horwitz, Bubba Trading.

 


Tuesday equity markets had one of the slowest 500-point rallies in history as they crept up 500 points. For traders it was a grueling day with no real price movement except straight up with no pullbacks. That rally continues this morning and right along with the equity’s gold continues to rally chasing down 1350.

With the equity’s strong gold tried to sell off but there is a lot of strength in gold which is what we wrote about on Friday. Gold looks like it will trade up 1350 before and sellers show up to take profits. For those that think gold is only a safety play why is it so strong into a rallying equity market? The answer is simple, gold is a stand-alone hard asset and trades like any other market.

While gold traders and investors are once again having a wonderful time, Silver continues to struggle. Although silver is rallying it can’t seem to break above resistance and the Gold/Silver ratio is over 90. This means that gold will have to sell off or silver will breakout. Although we aren’t buyers of silver yet, the positioning suggests that it will breakout to the upside soon.

As I look into my crystal ball, I would expect to see gold have a pullback to 1310-1320 and Silver back to 14.6 before attempting to breakout to the upside. The selloff should come today or tomorrow into Friday’s jobs which could be the catalyst for the breakout.

Todd Horwitz
Chief Strategist
BubbaTrading.com

Financial Markets and Political Commentary
 

Tags

, , , ,

Related Posts

About the author

Todd Horwitz - Author of “Average Joe Options“. Todd began his trading career in 1980 at the CBOE. He was one of the original traders in the OEX & helped start the SPX. He is a member the CME where he trades S&P futures as well as foreign currencies & is a regular contributor to CNBC, Bloomberg, BNN, Fox & many other major news networks.