1212 is key support here. A weekly chart going all the way back to 2009 when gold was at 875. That’s the first intersection point. The second intersection point was the June low at 1184. Today’s low at 1212 was the trifecta.
This is a low risk area to initiate speculative longs. As usual, you must use protective sell stops.
The trend-line above? That doesn’t come in until 1665. Does that mean I think we’ll bounce $450 bucks to that level? Nope. I am not saying that at all.
Right now, people are bearish gold. That hasn’t been a true for a while. I don’t hear the Gold $5K an ounce people on the radio anymore. Remember gold 1944.40 ? that was only $732 bucks ago…. If you were unlucky enough to buy Gold at $1944, you’re sucking wind to the tune of a 37% loss. Bon Appetite.
That high was posted the week of August 22nd 2012. about 3 months before the election… A lot of fear and loathing in the markets back then. The Dow was looking pricey at 12,000. 4K pts later here we sit today.. If you exited the Dow back then, you left 33% on the table. The increase from Dow 12000 to Dow 16000 is 33%.
If you were unlucky enough to get out of your stocks and buy gold that week of August 2012… You created a mess for yourself.
This is a chart of the Dow since 2012. contrast that against the weekly chart of Gold above.
The “smart” defensive play at the time being touted by a lot of folks, ie, short Dow long gold. or at the minimum… long Dow, long gold as a hedge…. didn’t really play out, especially if you bought physical gold or gold futures. Your best bet at the time would have been to say long the Dow with put protection, and to use gold call options as your insurance hedge.
CER