Gold bugs showing lots of strength

Gold since 2013, as measured by the GLD etf, has been in a downward trending channel but has recently shown a lot of strength and may be bucking this trend. As you can see by the chart, the channel that was resistance since May 2013 looks to be the new support. Does this mean Gold is now a good investment? Does this spell more trouble a head for the market?

To be honest, Gold is not something I typically trade but I am getting interested. Perhaps a good short would be once it reaches $125 and a good long would be if it re-tests the trend line or goes down further to $112-$113. Right now I would like to see further confirmation that a new trend is in place before jumping in. As a trader, selling naked Puts at $112 could be a more conservative trade or an ultra conservative trade would be selling the $112 puts and buying the $107 puts as protection.

With negative interest rates in Europe and Japan, and if the US Dollar falls it may also be a good longer term investment. Personally, I would like to see a pullback before dipping my toes into it however you cannot argue with the technical setup, which is indicating that now just may be the right time to get in.

GLD_2013

Advertisements

One thought on “Gold bugs showing lots of strength

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s