GOLD TRADE ALERT (2:30 pm EST)
I covered my short position in gold early this week as technical and cycle factors seemed to point to an imminent short-term rally. This possibility seems even stronger now as gold and silver made new lows yesterday just above strong support at $1200 in gold and $17 in silver. I stated in Sunday's blog that I didn't think it was worth going long because the rally could be brief, but I am thinking now that a short-term trade in gold may be worth going for here as technical factors indicate it could be substantial. One of these factors is the extremely overbought U.S. Dollar which seems ready to take some sort of correction now. The low target for this gold rally would be the $1240 area, but it is possible it could also get as high as $1290. For these reasons I feel it is worth going long now with a close stop loss in the support area around $1200. Please understand that I am doing very short-term trading here as the peak to this potential rally could come as early as next week. Traders who are not comfortable with this kind of trading may want to remain on the sidelines as I will probably be looking to cover this long position soon (possibly next week) and sell gold (and possibly silver) short for a more substantial correction into new lows into the end of the year. Going long today in gold.
I covered my short position in gold early this week as technical and cycle factors seemed to point to an imminent short-term rally. This possibility seems even stronger now as gold and silver made new lows yesterday just above strong support at $1200 in gold and $17 in silver. I stated in Sunday's blog that I didn't think it was worth going long because the rally could be brief, but I am thinking now that a short-term trade in gold may be worth going for here as technical factors indicate it could be substantial. One of these factors is the extremely overbought U.S. Dollar which seems ready to take some sort of correction now. The low target for this gold rally would be the $1240 area, but it is possible it could also get as high as $1290. For these reasons I feel it is worth going long now with a close stop loss in the support area around $1200. Please understand that I am doing very short-term trading here as the peak to this potential rally could come as early as next week. Traders who are not comfortable with this kind of trading may want to remain on the sidelines as I will probably be looking to cover this long position soon (possibly next week) and sell gold (and possibly silver) short for a more substantial correction into new lows into the end of the year. Going long today in gold.
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