We certainly are trading in interesting times.Despite continued economic woes and increased unemployment the U.S. is continued to be supported. Much of the U.S Dollar strength is due to the avalanche – like sell-off in the Energy sector. Reports out of South Africa report Gold production was down 18% based on third quarter numbers.(Supply & Demand ???).
With the U.S Auto Industry on the ropes and a bleak Holiday shopping season on the horizon it appears the pressure will continue to be on the Stock Market to move in a positive direction.However, as we have witnessed in the very recent past anything can happen.
Normally this would be a great opportunity to buy the Gold dip and put on some Bull/Call spreads. My Gold charts tell me the Market is going to higher but the rallies the Gold has experienced have not held. This tells me the gold trading community is GUN-SHY and not holding long positions as long as they once did.
With the new Government ready to take control I do not foresee any sense of calm until key Cabinet Members are introduced. I still believe Gold is going HIGHER and I still believe Bull / Call spreads are the way to go. But as we all know “timing is everything”…
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Traders Illustrated /Gold Analyst