Gold Market Wire
News, analysis and commentary for gold traders and investors
Gold Market Update
Gold: When It Pays To Be Boring
June 16, 2022 - (Gold Market Wire) - Everyone knows the old adage "Gold is store of value". It can really grate on the nerves of the trading community - especially when, as of late, the market is deader than the proverbial doornail.
But let us spare a thought for those old aphorisms, and appreciate their value. Yes, Gold is doing little, while turmoil rages across the world and the markets. The S+P 500 is down well over 20% from the highs, the currency markets are about to give a death shot to the Euro and the Pound (while the Russian Ruble rages stronger by the day...), and Gold just.... sits there around 1850....doing little or nothing. Not a bad performance really...not bad at all.
Our frustrations, and the reason why so little has been written as of late - is that we seek to trade, and Gold is not really providing us with any opportunities. But one must still give a nod to those old aphorisms...and realise they are there for a reason. Hanging on to Gold has been a very reassuring and comforting thing as of late. It certainly helps with the sleep at night. Until we get a decisive move, and the break vis-a-vis the US dollar sustains itself, the drift continues.
In the above chart we can see the immediate challenge we face. We need to get above that downtrend and close there on a weekly basis. We remain of the view that we are getting close to Gold moving seriously. The problem now is whether we will get a real bull run that allows us to trade from length, or if we instead, simply wake up one morning and find Gold several hundred dollars higher in a single shot. That could be an argument to tweak core positions and add a bit more.
For the more adventurous, repeated wing buying in (call) options could be a highly successful, if expensive, position to take, if one feels the surge coming. You'll have to keep paying out for those cheap delta/naked calls - but there's a good shot it won't be years before the payout. Right now, the Euro and Sterling look like they are about to have a religious experience. That could be just the ticket we need to send Gold soaring.
It's a mad old world these days.
Gold is doing its job just fine - while turmoil builds and builds around the globe and in the markets.