GDX: Gold Miners Geopolitical Hedge
The multi year cup and handle provides good upside catalyst to hedge further geo-political risk. I don't think the Russia/Ukraine war is going to be resolved anytime soon.
GDX is preferred over GLD here because GDX will have positive carry (from cash flows of the miners) and the spot price is high enough to warrant some production. This is a good place to start to build a small position; what I are looking for here is a stronger volume signature as confirmation; but because of the way gold trades (meaning something adverse happens) I would expect the rip up to be very violent and aggressive so it merits building a position now and slowly buying dips. MACD has crossed recently giving us some small confirmation of bullish price action.
GDX is preferred over GLD here because GDX will have positive carry (from cash flows of the miners) and the spot price is high enough to warrant some production. This is a good place to start to build a small position; what I are looking for here is a stronger volume signature as confirmation; but because of the way gold trades (meaning something adverse happens) I would expect the rip up to be very violent and aggressive so it merits building a position now and slowly buying dips. MACD has crossed recently giving us some small confirmation of bullish price action.
Trade active:
This fade of GDX doesn't erase the geopolitical issues - trade should remain active and get re-bid as more risks will emerge.
Comment:
Anticipated Positive carry is not working out to well (vs GLD)
