Gold dropped Tuesday because the Federal Reserve might raise rates. Silver dropped because gold dropped. Wall Street banks rewrote their forecasts because they were wrong the first time and will be wrong again.
The metal did not care. The metal sat in vaults doing what it always does. Nothing.
Retail traders panicked because a central bank said words. They sold their positions to buy them back higher next month when different words get said. This is called investing.
The banks that missed the last move now predict the next move with equal confidence. Goldman changed its target. JPMorgan adjusted its outlook. Citigroup revised its models. None of them will be right but all of them will publish reports explaining why they were almost right.
Somewhere a guy with $8,000 in a Robinhood account read "rate-hike fears" and sold his gold ETF at a loss. He will explain to his wife that the Fed pivoted. She will ask what that means. He will say the charts looked bearish. She will go back to her phone.
The actual reason gold moved is because a computer in New Jersey decided to sell gold. Then another computer in Connecticut saw that computer sell and also sold. Then fourteen thousand more computers sold. A CNBC anchor said it was rate-hike fears because she needed to say something between commercials for tax software.
Silver fell harder because silver always falls harder. It is gold's untalented younger brother who gets hit first when Dad comes home drunk.
The technical levels held until they did not hold. The support became resistance. The resistance became new support. The new support broke. Traders who bought the dip now own a rock that costs less than it did yesterday, which is the same thing that will happen to the traders who buy tomorrow's dip.
Meanwhile the metal sits in a vault accruing storage fees, doing exactly what it was doing when it cost more.
Photo by Dash Cryptocurrency on Unsplash
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