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SideShowMel0329 (33.24)

Time to short gold again!

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May 08, 2009 – Comments (4) | RELATED TICKERS: GLD , GLL , GOLD

I've repeated many times that I'm not a technical trader (I've been short on gold since the beginning of the year), but I couldn't help but notice we're at a key resistance point on the 60-day chart

This is the same spot we were at on April 25th before gold took a hit (roughly $915/oz), and it's just below the second resistance point (seen around April 1st) at $923/oz.

If you're overall bearish on gold right now and are looking for a good entry point, next week looks promising!

4 Comments – Post Your Own

#1) On May 08, 2009 at 4:29 PM, speedybure (< 20) wrote:

Me being a gold bug aside. Gold continues to make higher lows(since Nov) and it seems that if they market thinks were sinking further into a recession gold will go up and if the market thinks we are coming out, then inflation will pick, and accelerate very fast. In addition, China's announcement of increasing their gold reserves to 10% would negate short term drops in the price of gold as that would be the logical time to buy for them. 

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#2) On May 08, 2009 at 4:59 PM, goldminingXpert (28.97) wrote:

Bows down and pays homage to this. We are in your honour, great sir.

(I actually disagree with your post, but we've already established that my opinions are meaningless on the other thread.)

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#3) On May 08, 2009 at 5:05 PM, silverminer (29.88) wrote:

If you're overall bearish on gold, then you need to reconsider. :) Against the mountain of evidence in support of gold's inevitable rise that I and others here have assembled, you'll have to bring more than just an unsupported sentiment to the table before trying to steer Fools down what I consider to be the most dangerous path imagineable.

Shorting gold, as I explain here, is simply not recommended. If you don't agree about the fundamental drivers of the precious metals bull market, then stay away from it... but shorting it is a whole different can of beans... worse yet when you try to draw in other Fools.

Speedy is right, gold will rise going forward no matter which of the two scenarios play out... if the stimulus and fiscal interventions miraculously work (fat chance), then gold will wise on the back of rip-roaring inflation. If the deterioration of the U.S. / European economies continues, then gold will rise on the flight to safety and later bolstered by stagflation.

 

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#4) On May 08, 2009 at 5:35 PM, goldminingXpert (28.97) wrote:

TMFSinch, what would be your opinion of buying something like UNG/CHK/a nat gas MLP or the like as an inflation hedge? I've been purchasing some combination of these in all my clients accounts over the past month and so far results have been good. I'm thinking this gives me a solid way to cover my rear if I'm wrong and inflation returns without having to sacrifice my belief that the metals (particularly gold) are overvalued on a ratio basis (oil/gold for example) vs. other commodities.

FWIW, I wouldn't short gold here (other than a few overpriced miners as a hedge play against buying cheap miners as stuff like GG is still wildly overpriced vs. the likes of NXG or JAG.) but I certainly don't think gold is a great value either

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