Correlation between fear and gold
is pretty much intact. Besides when it's trading near 1000 it's obvious that it attract more buyers than usual. Because people thinking about bottom in gold
are also itching to jump in. So now what's next? Well it totally depends upon equity behaviour. Now it looks like S&P
could bounce upto 1950 / 2000 and that is going to put a ceiling on gold
bounce. In that scenario, next trip for gold
is obviously to 1160 or 1140. That's where things will be interesting because if stars align i.e. S&P
2000 and gold
1140/1150 then we need to observe how things work out from there. Another equity meltdown ( may be caused by another Fed hike during that time ! ) and gold
will get new life. Well that's too distance in future and we will revisit the trade at that time.
For now, every bounce is a sell until stocks starts to wither. Buying puts on bounce towards 1220 / 1230 makes sense targeting levels near 1180 first and 1160 next.