The interesting thing about markets: just when you think you’ve figured them out, they do the opposite. Just six trading days ago, precious metals looked ready to run; we reversed our position on the silver in a long position. Since the August 12 peak, the metals have closed lower every day.

Therefore, price action is important. This gives you better control of the markets and prevents you from chasing after the news cycle. There are many reasons why gold, silver and platinum should rally, but they are not. Price action has told us that there is no rush to be a buyer.

Markets have many factors that move them, but one that is never important is the news cycle. Any news that could boost the markets is always priced in before you see it. The flow of information is well ahead of the reported news. Do yourself a favor, stop guessing or trying to outsmart the market and let the price be your guide.

Precious metals should be held on a physical basis with capital that is not needed tomorrow or anytime soon. Trade must be done with paper. Knowing this, we can trade back and forth without emotions.

In all markets, price action determines what happens the next day, week or month. Keep the two strategies separate. The worst trade you can make is to turn a trade into an investment in hopes of a way out. Traders must learn to take their losses and move on to the next trade.

Patience, discipline and money management always win out. Let the market map show you the way.

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Disclaimer: The opinions expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. This is not a solicitation to trade commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no responsibility for loss and/or damage resulting from the use of this publication.