Gold, crude and grains in free fall

April 21, 2020

New York (Apr 21)  Out of nowhere, almost all markets are in danger of collapse. I certainly don’t want to give dire predictions, but the market action doesn’t lie; there are problems out there. There is nowhere to run, nowhere to hide. Goldreversed $30 from its high in minutes; silver and platinum did the same. The dirty word is deflation.

On Monday, crude oil traded where no one thought was possible – negative. The expiring May contract was trading at a -$40 per barrel at one point, indicating owners of crude had to pay to get rid of it. Crude was in free fall and was in all-out panic. The action was a classic squeeze in an illiquid market, and there was no exit.

 This morning, crude has started to tumble again along with the grain markets and other commodities. Gold, silver and platinum are at must-hold levels or they could turn ugly as well. The powerful patterns in the metals had faded overnight; we are still long but with concerns.

The bottom line is simple – almost every market is at a major level. Failure to hold could see a continuation of the meltdown in some markets and create one in others. The yellow flags are out and caution is the word of the day. Don’t panic, but be aware.


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