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.