It’s only been 3 months since gold broke up through 1200, and just this week gold popped up through 1500. And now here we are pushing up toward 1600 just 2 days later.
Your friendly Gold Enthusiast feels like he’s given you all the reasons gold should go up. In case you weren’t following closely, they are insecurities in the global markets, high levels of debt making investors nervous, the US-China trade war, Brexit, and the EU’s inability to get their economy working well.
Which all lead to the biggie: Too few investors actually in the gold space, meaning there were lots of possible new entrants coming into gold, bringing lots of new money. Even Cramer said gold should spike if everyone rushed in all at once.
So now we’re starting to see lots of new money flowing into gold. In trading terms that’s fantastic, as long as (a) you’re on the long side of the trade, and (b) you keep your eyes open for signs of a rush to the exits.
So far the naysayers only have 2 arguments against gold, neither of which carries a whole lot of weight (in this observer’s opinion). One, Bitcoin “should” be taking gold’s place (despite all the problems with non-transparent exchanges and even outright thefts). And Two, gold is overbought right now (which happens with almost every stock breaking up through its a 52-week high to set a new high, which has only happened about a billion times during this long bull market).
So your Gold Enthusiast is watching money flows now, looking for signs that new money is slowing into the gold sector. For now, we’ll just say no sign of that yet.
Signed,
The Gold Enthusiast
DISCLAIMER: No specific securities were mentioned in this article. The author is long the gold sector via positions in NUGT, JNUG, a few junior miners, and covered calls on parts of the NUGT and JNUG positions. He may be making small, non-market moving trades over the next 72 hours for reasons discussed in the article.
The SPDR Gold Shares (GLD) fell $0.22 (-0.15%) in premarket trading Wednesday. Year-to-date, GLD has gained 17.57%, versus a 7.80% rise in the benchmark S&P 500 index during the same period.
GLD currently has an ETF Daily News SMART Grade of B (Buy), and is ranked #1 of 33 ETFs in the Precious Metals ETFs category.
This article is brought to you courtesy of ETF Daily News.
About the Author: Mike Hammer
For 30-plus years, Mike Hammer has been an ardent follower, and often-times trader, of gold and silver. With his own money, he began trading in ‘86 and has seen the market at its highest highs and lowest lows, which includes the Black Monday Crash in ‘87, the Crash of ‘08, and the Flash Crash of 2010. Throughout all of this, he’s been on the great side of winning, and sometimes, the hard side of losing. For the past eight years, he’s mentored others about the fine art of trading stocks and ETFs at the Adam Mesh Trading Group.