Gold Market

I Will Stay Bullish On Spot Gold as Long as the Break Out Area Holds

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spotgold20090921 The GLD ETF declined today on what I consider to be light volume.  I think it is going to go into a sideways consolidation this week with an outside chance of a sharp reversal move up topside later in the week.  The setup still looks contructive to me on both the GLD ETF and the spot gold price.

In the chart above as long as the spot gold price holds above the 988 level which is approximately where the long blue key support line is, then I will remain BULLISH on gold for the rest of September and the last 3 months of this year.  Spot gold already did the job of breaking above this line on big volume, but not blockbuster volume.  We could pull back all the way to 990 and I would still be bullish. 

It is possible that we could enter a sideways trading range for some time but we do still have the very bullish seasonals until the end of this week and at various other time frames into the end of this year.

Why be bearish on spot gold if the chart is not telling you to?  The charts do not lie and I am not going to doubt this spot gold price chart.  Obey and stay above the breakout area, then I am happy to be a gold bull.  Break under it, then something else is going on and the bull case is delayed.

Clean. Simple. Effective.

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Spot Gold Closes Over 1000 Again

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spotgold20090911

If you take a close look at the chart above you can clearly see that the spot gold price has successfully broken above the longer term down trendline since this mini bear market in gold started in March of 2008.

Despite this bullish action there is still a lot of talk that gold will break down again and maybe go to 850 or somewhere near that level.

I have a hard time believing that at this point.  I would rather just trust this simple chart which is saying to me that a successful break of the bearish downtrend has occurred and so now it should be assumed that we should eventually get continuation to the upside and probably at a faster speed than usual because there is zero resistance on the left side of the chart above 1034.

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Spot Gold Trades Over 1000 Again

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It is time for the gold 1000 Party!  Remember CNBC had that Dow 7000, 8000, 9000 and 10,000 party? I forget if they did it for all of those milestones or just one of them.  Maybe they should start a gold 1000, 2000, 3000, 4000 and 5000 party too? Wait, scratch that.  I forgot, people … Read more

Hold Gold Through September

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A while back I mentioned how I thought gold was ready for a big move and had a bias towards the bullish side based on longer term charting.  I also mentioned the GLD 100 January Calls which at the time were trading around 4.00 .  Now they are trading near 5.60 or close to 50% higher.

I expect them to trade even higher than that during the month of September.

Most of the time in my opinion options are a bad idea unless you can devote full time to them and maybe even work with professional options trader for cues.  There are just too many ways in which options can go wrong.  And there are too many factors that can go against you, with one of the biggest ones being time decay.

Time decay means your timing has to be spot on otherwise you will keep losing ground in the price of the option the closer you get to expiration.

Anyway, some people like options.  Personally I can’t stand them because I think there are better ways to play the market with similar returns to options but without the hassle of time decay and other factors.

That said, once in a blue moon options can be a worthwhile trade.

The reason I mentioned the GLD 100 January Calls Back on the 3rd of August 2009 was because I felt we were coming into a very unique breakout type scenario in the gold price.  I thought it would happen sooner, but here we are in September 2009 and it appears to be in full force now.

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