Gold and Silver spiking higher on Geopolitical fears
After Friday’s big rally in metals we are seeing a repeat this morning. The terrorists attack in Kenya last night and the continuation the issues with Iran are causing global fears pushing metals to highs not seen in months.
What does this mean in the big picture of gold and silver? Although we are long both gold and silver this action is actually more bearish for long term pricing than bullish. This entire rally went from being f driven by a solid technical pattern to one of fear.
Markets that are driven by fear are doomed to fail and we would expect this rally to fail miserably. We will maintain our long-term bullish views on the metals however in the short run we are looking for a place to sell. We are expecting a 2-3% sell off in the next couple of days before this rally resumes. The move up is too fast and can’t be maintained. The bigger the rally from these events, the bigger the sell off we will see.