Monday, April 15, 2013

Massive gold sell off causes 2 year low, now what?

 TRADING ALERT 


At this time of writing gold is still trading at a little over $1400 an ounce. This massive sell off that occurred last Friday (look at the volume on the chart above!) is what shaved $100 an ounce off in such a short period of time. Investors are no longer interested in gold it seems and are rather putting their money elsewhere, something more risky and preferably with a higher return: that's what happens when risk appetite comes back! The Dow has never traded so high and is almost near a whopping 15,000 points, it's never been so rosy in trading land, even the VIX ($VIX) shows it - trading a little over 12 points - despite some turmoil in the European Union (Cyprus, Greece etc). 

The question as always is: how low will it go?


As of right now 52% of traders are bearish when it comes to gold. Couple of different ETF options here, including $GOLD, $KGC, $GDX and $GLD - no matter which one you pick the recent drag on gold affected all of them. Which such a high volatility it is just a downward slope from here, judging by the charts and some fundamentals I see gold dropping well under $1350 an ounce! In fact, if you can manage to snatch gold at around $1400 - the rate it is going for right now: SHORT IT LIKE NOBODY'S BUSINESS. 
I think I made myself clear that I'm pretty bearish on gold. 

Shorting it right now, with my target set on $1350 and my SL $1450 - pick your own ETF!

Disclaimer:

All opinions expressed, trade recommendations/advice on this website are solely of John van der Munnik and are not affiliated with any investment firm or any other organization. You should not make an investment only based using this website VDM Trading for your trading needs without seeking help from your own financial advisor.