Perseus

Gold long continued

Long
FX_IDC:XAUUSD   Gold Spot / U.S. Dollar
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14
Looks like gold wants to correct a bit from the fresh high we just made for 2017.

This could possibly tag the 1230/ 40 area before continuing upwards for a clear break of the 6-year trend-line, which is still giving us some problems.

Gold has a lot going for it, as the dollar continues to make lower lows (made a new 2017 low this week), while continuing to make lower highs.

GDP numbers continue to be revised down as we continue to get weaker and weaker data from the U.S.

I am by no means saying to wait until 1230/ 40 area to go long, or add longs. I'm just saying it's an area that we might tag within the near future. We could possibly bounce beginning early next week, and continue this 2017 bull rally after the FOMC, without even reaching that level.

Miners have bounced well during this run, which was long overdue.

We're also far too late to have a massive drop into FOMC, and I think with all the weak data coming out recently, the market knows the Fed is in a tight spot when it comes to raising (hence the fall of the 10Y).

It's also humorous that people who have been short from the 1240-50-60 areas before the rally to the mid 1290's, are now claiming victory even though they were just $50 underwater and are finally starting to break-even on this healthy gold pullback. A broken clock is right twice a day.

Good luck.
Comment: As usual I underestimated the drop by roughly $10 (I always tend to forget that gold overextends both rallies and falls).

Good thing is miners have continued to hold strong. I'm currently long in BTO, EDV, and SSL on the TSX (Not holding any senior miners). I added to these positions today after reading the Fed's minutes.

I will be watching here closely to see if this rally continues, or if we break down. But given the current strength of miners, I believe we will bounce from here.
Comment: There was another random selling last night which caused both silver and gold to drop. It appears that these are ruining gold technically, however the underlying fundamentals are still the same.

Wage growth missed again today, and on top of that they revised the prior months lower. This goes against what the Fed has been saying, however I believe they will continue to tighten as they really aren't data-dependent anymore.

Either way, I'm staying long gold. As noted numerous times, I am not a day trader, I'm an investor, and junior miners have held up very well during this drop.
Comment: I forgot to update that I had closed my position on BTO (a little too late imo), and am now solely running positions with SSL and EDV (increased positions).
Comment: If we can continue to rally from this level, then it looks like this was a false breakdown of the current trend-line we're on.

A bounce from here should place us safely on the bull side of the 6-year trend-line.
Comment: Update on my portfolio...

No longer holding SSL or EDV. Now only holding BTO and ABX.

Really like ABX from a technical perspective right now.

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Comments

Thank you Perseus! sell gold and buy miners! gold could be ranging or worse if the DXY bounce off quickly.
+1 Reply
Perseus Victor.Y.F
@Victor.Y.F, Yes, miners are my play from here.
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Victor.Y.F Perseus
@Perseus, watch out Renminbi's hike, it'll help the inflation. Expecting a capital squeezing from US dollar and stock market. Focus on miners, it's a safe one.
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Thanks for an update..I do totally agree with your last comment...its not a good time to "day trading Gold at the moment for many reasons....But from the position of an investor/position trader...the juniors look to me like screaming buy...im slowly building my position in GDXJ and adding to JNUG...lots of people on TV predict drop to 1160..well,its very unlikely...in my view,bullion banks would not be risking "shaking " so hard the confidence of the pm market further,which is already at historically very low levels....and hedge funds have started buying juniors heavily in last couple of weeks through their "dark pool exchanges""...may be aanother month or two,and we would definelely see a massive break to the upside..
Patience is not only a virtue in this market,but the main key to unlocking huge profits before the end of 2017!!
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Perseus leonarddavidson60
@leonarddavidson60, I agree.

I made a post a few months ago stating that I would rather be caught long in gold and miners, than short. There's simply too much going on right now globally, especially with the slow growth and USD weakness we've seen to be short gold long-term.

I don't see a drop sub-1200, but then again I thought we would bounce around the 1230 area, so I've been wrong before. It's hard watching these flash crashes in both silver and gold, since there's really been no explanation for them. However due to there really being no explanation, I'm confident they will be short lived.

Only time will tell, but I feel like the trade here is to be long miners.
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@Perseus, yes..despite all gold price manipulations at Comex casino lately,the miners are still holding pretty well which is quite bullish ... most of the hedge funds are not buying latest "price capitalition" in gold price and holding to their already large positions in miners..thats is why ,in my humble opinion,we have not seen major panic selling like in the past....the price of gold may be pushed lower or higher in short time frame,but if you go long in juniors now .. ..you can make money regardless..sooner or later..
Thanks for your work and sharing with us your ideas!@
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Perseus leonarddavidson60
@leonarddavidson60, Yes I believe over the past few weeks we've had a great chance to grab some quality miners on sale.

Essentially, if you are an investor (like we are), these sales are a great place to get into a very solid position with miners.

Best of luck to the both of us.
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Manipulation or not, the miners pointed the direction accurately "this time". I am starting to add small longs. GL
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Perseus lord_kinbote
@lord_kinbote, I am with you on longing miners.

I'm currently long SSL, and EDV as I've sold BTO to purchase further into these positions.

GL.
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