A lot of noise is surrounding the rally of the gold price these days. First of all: a lot of people – the believers – think that the Big One for gold has come… Everything is possible of course, but to ignite a rally for the Big One someone need the money. Where is it going to come from, these days?
While everybody is running for the hills, I would be surprised to see a gold price at –say- 1200 USD/oz anytime soon.
That’s because the buying power is not widespread. No jewelry, no sovereign fund, no India … only investors demand concentrated in the Exchange Traded Funds.
Secondly: a lot of other people – the non-believers- are going to play this from the short side. The set up looks fine: waiting if another round of hope is coming and if not – sell this overbought rally like hell.
I am both. As a believer and a non-believer (we saw too many rallies broken in the butt) we play this thing at the long side for the moment, but with a tight stop. And not risking the whole house.
The renko chart is still upbeat. A good start for a stop-loss would be the 60 minute bars. The SAR stands at 930 USD/oz. That’s already a low stop if you are in this trade. But also indicates how fast everything went up. Too quickly.
While everybody is running for the hills, I would be surprised to see a gold price at –say- 1200 USD/oz anytime soon.
That’s because the buying power is not widespread. No jewelry, no sovereign fund, no India … only investors demand concentrated in the Exchange Traded Funds.
Secondly: a lot of other people – the non-believers- are going to play this from the short side. The set up looks fine: waiting if another round of hope is coming and if not – sell this overbought rally like hell.
I am both. As a believer and a non-believer (we saw too many rallies broken in the butt) we play this thing at the long side for the moment, but with a tight stop. And not risking the whole house.
The renko chart is still upbeat. A good start for a stop-loss would be the 60 minute bars. The SAR stands at 930 USD/oz. That’s already a low stop if you are in this trade. But also indicates how fast everything went up. Too quickly.
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