Gold trades at $1315/oz as it chips away at its highest levels since September. There is nothing spectacular to see here, nothing to get the pulse racing, just slow and steady, like an old man climbing the stairs one step at a time. Where you have a rising market in which everyone is already long the risk is rarely supportive of the trend. It is not difficult to find repeating patterns where these slow, steady rallies are shocked out of complacency by sharp falls. Investors would be wise to keep their trailing stops in place because when the shake-out comes, and it will come, and the gains that may have taken many days to build will be lost in a single day’s trading. This doesn’t mean that the trend is wrong, but sometimes these spasms are good for the market, as it releases capital.
That doesn’t mean that you should be building up a short position either, it’s just a warning to stay alert and look for the opportunities that panic brings.