Don’t Confuse a Gold Rally with a New Bull

gold in handIf you’re looking to buy the dip on gold, Charles Nenner says an opportunity might be in the offing but the rally won’t last. “The cycle is still down,” Nenner says in the attached video, dismissing the idea that the yellow metal is making more than a temporary low. Nenner works with price cycles and time frames. From that perspective we’re getting close to what he sees as a late-April bounce that can be traded, but he isn’t going to make a call in the middle of a downward move. You just have to wait.

Nenner also incorporates emotion into his trading. Towards that end, he warns investors not to seek justification for staying long with a hope for better days. Nenner says the human instinct is to hold on far too long. He says he’s been warning gold bugs to sell for the last $500 price slide, but the advice went largely unheeded.

“It’s very hard for people to get educated against staying in for the long run,” Nenner notes. Human emotion being what it is, the instinct is to hang onto to their buy and hold thesis until the panic hits. Now that gold has had 1/3 of its value lopped off, those long-term players are getting scared out of their positions.

See the full “Breakout” interview below:

Related: SPDR Gold Trust (ETF) (NYSEARCA:GLD), Direxion Daily Gold Miners Bear 3X Shrs (NYSEArca:DUST)

Leave a Reply

Your email address will not be published. Required fields are marked *