Buy the rumor, sell the news…
After a very quiet Monday in which gold only traded in an $11 range, the yellow metal has succumbed to heavy liquidation pressure today in the wake of positive developments in Syria. The following headline was released: SYRIA ACCEPTS RUSSIAN PROPOSAL TO PUT CHEMICAL WEAPONS UNDER INTERNATIONAL CONTROL TO AVERT A US MILITARY ATTACK. Gold was already selling off due to European equity strength but it fell precipitously with the revelation of this the Syrian news. Syria’s foreign minister Walid al-Mouallem was quoted as saying he agreed to the move to “remove the grounds for American aggression”.
While gold is down $23.20 today, it is finding bids at some important support levels around here. The 100 day moving average at $1,358.50 has held nearly perfectly today and two days ago (when it was also the low of the day). Below the 100 day moving average is a three point trend line at $1,350 which also represents the high from July and a previous break out level. Barring any further market shattering news, traders are cautiously positioning themselves on the long side ahead of these support figures.
All Things Considered – John’s Commentary:
Events are hard to predict. Trends are not. We are still firmly planted in the midst of a bull market in gold and silver. Although it may not seem like it, these price levels are a healthy retreat from previous over zealousness. Gold is on sale and silver is on the clearance rack. Buy when nobody wants to.
Action to Take: Avoid buying, (or actually sell a portion) when everyone wants to buy. That is one of the secrets to wealth in investing.
