Doesn't mean that I will trade only here, The Gold will get volatile, creating a lot of opportunities. AND we rock and roll with the market. catch the mid swing and flip it back and forth, within the channel.
There may be a quick flush - Trapping shorts .
This is multiyear plan. Not interested in what is happening tomorrow.
It does produce some random noise, still working on optimizing.
How to hedge main position against counter trend move with options? Its called Defending with Options. Google it, there are people who did some nice videos. Worth building the basics.
Pro $ Views:
Dollar is backed by real assets --
-- taxing authority over US (and even global) citizens
-- huge amt of natural resources (largest natural gas and oil reserves in the world)
-- tremendous influence over global resources and politics
-- strongest military in the world
-- among the most modern and sophisticated industries -- pharma, telecom
-- among the highest per capita incomes, quality of life, lifespan, literacy
-- legal protections for innovators / capitalistic incentive to innovate
Based on my perception of these the dollar isn't going anywhere, nor will gold supplant it.
WRT inflation, over time that has been the norm so a fair assumption. In the mean time, dollars have *long since* ceased to function as a store of value but rather as a medium of exchange. You use dollars to purchase current consumption (food, shelter etc) or exchange for cash flow producing investment for longterm consumption (investments). All dollars should go towards investments, and more liquid investments can be sold to fund current consumption if need be.
I am not saying I politically agree with this 100% but this has been the role of fiat currency for bordering on 2 decades now. so IMV dollars are either spend right away or invested, the investments are the savings, there is no need for anything more than a "rainy day" fund of cash sitting around. And investments outperform inflation, so that isnt a big concern.
Its not just the Dollars, one have to look at. There are things like, stimulus programs around the world, Market uncertanity - expanding volatile range, most importantly the basic supply and demand, Currency flow, International economics, etc..
IMO, Demand for GOLD is likely to increase. GOLD is still the main form of investments perceived by other countries and USA (some may not think so, I am not even gonna try convincing them), this is not likely to change for a few decades. And will change, if the FIAT Currencies can prove its worth.
Gold does not have much demand in the consumer market, when compared to its investment demands. We have seen exploding Dollar or any currency in the past, what followed is a lesson. Because of a simple co-relation, one's strength = other weakness, this will add a lot of pressure for any gov to fight the deflation (increase in currency value) by a QE or other means. Why do they have to fight it? Decrease in exports(income), while increase in imports(spending) on trades.
IMO, the current run in Dollar is backed by the stronger economy data, and ANTICIPATION of Rates going higher.
the news at the time (which is the hard part to find since before the google cataloging of everything era) was released that triggered the spike had to do with central banks (ceasing?) repo and loan of gold at the time. That singular shift basically sparked the decade long run to 2011.
In any event, that is something to watch for too
plus a 25 bps raise (this is a little off topic) to me is just like a token gesture -- I feel like the market has basically prices it in mostly theyve been dangling it in front of our faces for last few meetings.