The Gold bugs are back.
The second half of 2011 was not a great period for Gold, as the precious metal lost more than 15% of its value. In fact, in the last week of the year a rumored sell off by a large sovereign investor took almost 6% off of the price. It now appears that that rumor was correct.
Since it closed at the 1540 low on December 29th it has rallied almost 12% in a little over three weeks. At this rate it would be trading at over $3000 an ounce by the end of the year. I don’t think that even the most optimistic trader would expect that this would happen.
What caused the monster rally of the past two days?
It appears that when the Fed confirmed on Wednesday that interest rates will not be going anywhere soon investors looked for something to boost the yield on their funds and two things stood out.
First was the stock market that may be moving toward last spring’s highs, and second was a commodity that has been on a twelve year winning streak.
Interest rates now appear to be frozen for at least two more years, and this could mean more misery for the dollar and perhaps another round of higher commodity prices.
How am I going to recommend that you trade a market like this?
The same way I always do, observe price react to what it is doing and have the discipline to take your stops.
Discipline and reaction are the keys.
Reacting will create opportunity. Recognizing opportunity and the discipline to take advantage of it is my specialty. That is what produces winning trades.
I teach my students discipline and how to make it work for them in any type of market condition. I can teach you too.
To learn firsthand how I would trade this low interest rate enviroment , speak to one of my representatives and sign up to work one-on-one with me here:
http://averagejoeoptions.com/qual/
As Always,
Keep those stops tight.
Todd “Bubba” Horwitz
P.S. We run the fastest growing online options community. With weekly webinars and a very energetic forum, my team and I are always looking for great risk/reward opportunities. Click on the link below and become a member of my community today.
http://averagejoeoptions.com/qual/
