Gold prices have finally seen some reprise during Tuesday’s trading session, but the road to further upside may be a bumpy one, this according to Todd “Bubba” Horwitz, chief market strategist of BubbaTrading.com.
“Prices may hold for a while, but they still don’t look all that great. Remember, we’re still 20% from our all-time highs in gold and certainly 90% from our all-time highs in silver,” Horwitz said. “This is just a little bit of a squeeze right now, but until it really lasts and show me it can go, I’m going to hold tight.”
Spot gold prices moved almost 5% higher on Tuesday, with silver moving $1.03 an ounce higher to close at $14.30 an ounce.
Earlier in the year, Horwitz has called for silver prices to continue its downward trajectory and cause the gold-silver ratio to widen; it has since reached historic highs, hitting 114 on Tuesday.
Equities also rallied on the day, with the S&P 500 up 8.5%.
“I am long gold. I’m not real thrilled with this gigantic move up, typically in my eyes, rallies aren’t born on a straight v-shaped bottom, and I think there’s probably some work to do, either consolidating or coming down a little bit,” he said.
Tuesday also saw a discrepancy between physical and paper gold prices, which Horwitz attributed to commercial buyers propping up the physical market.
“I think that a lot of the big commercials are actually shorting paper and buying the physical, and that’s why you’re seeing the pressure on futures gold versus the physical,” he said.
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