The volatility in the economic sector has crossed all barriers from Wall Street to Main Street. The Stock Market has experienced triple figure moves on a regular basis causing sheer panic with investors.The price of Crude Oil has dropped from the $150.00 per barrel level down below $67.00 per barrel. Gold has not gone unscathed in the recent volatility. Many investors use Gold as a leverage to protect their Stock portfolio’s.This has caused the Gold market to drop from $1037.10 on March 8,2008 to the $695.50 on October, 2008 .(just 7 months later).
I remain Bullish long term simply because despite the “Bail Out ” very little has changed. Foreclosures are still happening, unemployment is still a problem, and the recent “Bail Out” is not a miracle fix. This current economic climate did not happen over night it certainly will not be corrected over night. It’s kinda like putting a Band-Aid on a gapping wound.these truly are the most volatile times of our lives.
I am looking to get long some Bull / Call spreads in the February contract because I believe there will be more rate cuts to come. Since Gold is the “anti ” Dollar i would rather be long gold than long the U.S. Dollar going into the Holiday season. Unfortunately I believe this could be a very lean Holiday season for many. (Consumer spending should be down). It also seems it is the time of year Employers layoff Employees.
I invite all to log on to Traders Illustrated.com for a free Magazine and to learn more about the upcoming Gold Trading Contest with the winner receiving 10 oz. of Gold!
LET’S TALK GOLD….
Mike Daly / Senior Broker
Gold / Marketing Director