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Frothy Markets
An old trader expression when markets are more volatile and going sideways is frothy markets. That is what we are seeing now with gold and silver. They have both been in a trading range for the last two weeks. One item to note about trading ranges is that prices will breakout of the trading range.
When gold was approaching its all-time high of about $2,060 an ounce its price became frothy and entered a trading range before breaking out to the upside. When silver was approaching its previous recent high of about $28.00 an ounce its price became frothy and entered a trading range before breaking out to the upside.
I feel we are in the frothy trading range period before an upside breakout for the metals. It is brave to purchase before the breakout. As the old proverb states, fortune favors the brave.
This week’s economic reports were also frothy. The November unemployment rate stayed at 4.2% with payrolls increasing while wages have been flat. While the FED’s Beige Book of economic activity showed stable economic activity while new initial unemployment claims increased. FED Chairman Jerome Powell said at a DealBook conference on Thursday that the FED could be more cautious with interest rate cuts with inflation above the FED’s target and the economy being stronger. All in all, frothy!
Go to our website for a free gold and silver guide, for more information, or to contact me about making a purchase. www.advisormetals.com
