As mentioned in one of my earlier posts, I’m interested in opening some positions in gold - is now the best time to do it?
What anybody “thinks” here (or anywhere else for that matter) is irrelevant if you are TRADING Gold. If you’re INVESTING in Gold that’s something else and this is the wrong platform for that. And even in the case of INVESTING: it’s a very slippery slope if the intention is to buy and hold. Only reason Gold is getting a bid right now is because of global uncertainties and more to the point the unloved rally in Equities. Could it reach the stars: who knows. I will find you ten qualified analysts today that will give you reasons for some coming meteoric rise in the Gold price. The moment Gold starts going down those very same analysts will be singing yet another tune. And so on and so forth. And ask anybody that bought physical Gold in the form of coins or whatever some time ago when the Gold price was rallying the last time. Only now are they probably around break even on what they paid. Gold is not what it used to be either i.e. the notion that it is a finite resource is no longer valid.
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I’m interested in opening a position in gold right now but on a limited long-term basis. I have a buy order pending at Friday’s high: if gold goes above that the order will trigger and I expect to get out with a profit before the end of the week and have an opportunity to re-enter long very soon after.
I’m just following price, I’ve no opinions with regards the fundamentals that might affect its’ price.
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Hello.
Well that’s my point really. YOU TRADE. This I know. And for sure it’s based on some or the other trading system or methodology etc. That’s very different from just buying Gold because some or the other hotshot has an opinion (or worse still an opinion from our resident inexperienced traders). And particularly with Gold (and Oil for that matter): the gibberish does NOT become a self fulfilling prophecy unlike with stocks for example i.e. you can make money on stocks even if you simply bought or sold based on analyst recommendations for the pure and simple reason that it’s a smaller market and every INVESTOR and their dog hangs on the words and opinions of these institutions. The other problem of course in holding these long and protracted positions open is interest. That interest eats away on a daily basis. There’s only one broker I know of that will allow you to open swap free positions so that you can hold them indefinitely but it can only be done with no leverage i.e. cash. Interest is not a big deal if the position is going in your favor. But hold onto something that ends up dead in the water for a couple of months (as Gold has the propensity to do) and those costs add up big time. That’s one of the reasons why, tempting as it may be, in my case, I’ll not bother with one of these slow moving illquid stocks. Everything may line up real nice for a position but next thing: it’s dead in the water for months on end. If you’re lucky by the time the frustration gets the better of you then you may end up with a bit of a profit.
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It seems that the future of gold price was raised by US$1.20 an ounce to US$1,824.00 an ounce and trading close to US$1,826 at the US close.
It seems most of the “good news” is already baked into the markets. Governments passed more stimulus, and vaccines are making their way across the globe. Stocks are at new all-time highs and there’s talk about a repeat of the roaring 20s. However, what’s happening in the real economy is entirely different. I don’t think we will understand the depth of this divide until next year. Below are some “potential hazards” I see going into next year.
Global inflation will most likely see a decline towards the end of Q321 and in Q421 despite remaining elevated compared to pre-pandemic levels which will put a lid on gold prices. Fitch said the 2022 gold price forecast of USD1,700/oz is underpinned by a belief that gold prices will start to weaken from 2022 onwards.