September 20, 2021 - (Gold Market Wire) - European stocks are trading more than 2% lower on the day, as fallout over the diplomatic rupture between the USA and France takes its toll. While many would have assumed that an international incident of serious magnitude, (- the first time in American history that a French Ambassador has ever been recalled from America -), would cause the Metals to rally, that, of course, is not how the markets work. Gold and Silver were being liquidated in anticipation of a large move to cash from all markets; which is exactly what we got.

As we wrote on Thursday:

"there is a feeling that the Metals' sell-off may be some kind of advance warning that equities are about to reverse. We have seen this pattern before over the past 5-7 years or so. The illiquid instruments get hammered first, and then the equities follow. "

That is pretty much what happened.

While Gold and Silver have had a slight recovery, there is little joy for the metals. Silver, it should be noted, is now down about 25% from its high, a little over a year ago - and is flirting with a major support line.

We are glad to be on the sidelines, and until we 1) hold the horizontal support and 2) conquer the downtrend line in the above chart - we can see little reason to get off 'the bench' and back into the game. Gold, much like Silver, is approaching an important horizontal support line - which it needs to hold.

In a less troubled market, one should consider buying here, but the threat of a stock market sell-off keeps us in a cautious state.

Patience, the discipline that all failed traders forget to cultivate, needs to be done so in spades now. We have no desire to try and "buy a major low" - with the threat of decent equity sell-off looming. We will wait.