In less than 12 hours, gold has closed above $1,350 and overnight almost got to $1,400.
For days we have written about the consolidation pattern that gold was trading in and that if the metal could close above $1,350, then $1,400 would be next. In less than 12 hours, gold has closed above $1,350 and overnight almost got to $1,400.
This morning all markets are exploding higher. Not only is gold up almost $40, silver is up 40 cents, crude is up $1.50, bonds are up 16 ticks and the dollar is getting slammed. Obviously, the markets love what the Fed had to say on Wednesday.
We expected this action but not quite this fast. We would expect the equities to reach new highs and the metals to continue higher. However, don’t be surprised at a big pullback. This action is too fast and furious, which will lead to selling pressure. We won’t try and pick the top, but we will look for opportunity to buy on pullbacks. When markets explode like this, it will take a couple of days to establish solid entry levels. If you are long, protect profits. If you have been waiting, don’t chase the markets here. Be patient enough to wait for the best levels to enter.