One of the best reasons to read every little bit of news is that it tells you when something’s moving for no reason.
Gold was that trade yesterday. It rose on data that pointed to tapering and it rose on data that indicated no tapering.
The more than $40 rise didn’t make sense, based on the news. There were rumors of a large buyer (aren’t there always) but yesterday those rumors made sense. That, or some kind of short squeeze after prices fell to the lowest since July.
It takes some courage to sell something when it rises for no reason, because there is always the fear there is something you don’t know. But gold’s 360-degree turnaround proves that was the right trade yesterday.
