Thursday, June 9, 2011

Gold Updates

The Gold Market may be updated temporarily turning down to sideways as the funds may shift as allocations may flow into other products.   The Indian Wedding Season has ended and the Gold Market may simply consolidate at these levels for now.  Fitch's ratings had warned the US that any potential default may take the AAA rating down. 

The US economy is fragile and any poor ratings, reports or further stalling on its recovery is bullish for Gold.  We also still have potential unrest globally and a terrorist organization out there to caution us to stay alert and be ready for anything.  The Gold Market does not always go up, but it certainly moves in times of dour circumstances.  While we may stay in this range for a while, it is precautionary to many events.  We use Gold as a hedge against inflation.   We use it to counter market crashes.  We rely on it through the ages and will need to continue to do so!

The August Gold market updated and  reached a high this week of $1555.00 and a low of $1531.80.  I am in a very bullish mode until the GCQ11 should penetrate $1529.00.  The current point of control or comfort zone may be $1542.10.   We have rolled to the August Gold !  This market is coiling and may break out soon!   Those who hold long positions may want to trail stops to protect any accumulated profits or prevent losses.  

While I am long term bullish this market, it is essential to have a trading plan with worst-case scenarios in mind.  Once you accept the risk of the trade, then all you need do is follow the plan.  Intra-day trading, we do bracket our trades with precise stops.  The use of stops, while prohibitive may allow an account take smaller losses during some very large market moves.  To live to trade another day!  

The use of options with futures positions and/or option strategies may again keep the risk at a specific level. Now we may find the market potentially could climb to $1596.00 or much higher this or next year.  Some analysts are forecasting $2000.00.   Gold Updates is still a Safe-Haven market that seems to hold value during most economic conditions.

1 comment:

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