Gold Hits All-Time High

With gold consolidating so close to all-time highs, the deck was stacked for a breakout. While the pundits pointed out plenty of good reasons why the metal should sink, perhaps even sharply, the gold chart showed that the path of least resistance was higher.

And that’s exactly where it went. Overnight, nearby gold futures broke through previous all-time (not inflation-adjusted) highs of $1033.90, and as I write the Dec contract is approximately $1032. Some will attribute the cause to concerns that Middle Eastern countries will switch away from the dollar. That may have been the straw that broke the camel’s back, but traders know there is more to the story. Gold had been consolidating for months. That it finally made a strong directional move should surprise no one.

Click to enlarge:

I’m playing the trend by trading short-term moves in gold and silver futures, and building positions in junior and mid-tier miners. Here are a handful that I am currently long (all positions put on in past few days).

Claude Resources (Amex: CGR)

New Gold (Amex: NGD)

U.S. Gold (Amex: UXG)

MineFinders (Amex: MFN)

NovaGold (NYSE: NG)

Yamana Gold (NYSE: AUY)

Disclosure: Long all of these stocks. In and out of gold / silver futures.

Comments

[FitBusiness...:]

Thanks for this article! It's been great watching the yellow bricks rise in value.

The real question I am asking is..."How far away is 2k?"

I think it may be a reality very soon.

Oct 07 10:56 AM

[TurtleTrader72:]

I am a big believer that gold in a currency investment more than anything else and is heavily based on the US dollar. However, although gold has recently made new highs, the US dollar has not made new lows. Does this divergence mean that gold is getting ahead of itself? Or is it predicting a new low for the dollar? I'm not entirely sure. I do feel that gold does have more upside potential but i am concerned that the trade is a crowded place. It is hard to find a dollar bull these days so i wondering if that is a contrarian indicator. Just something to think about...

Oct 07 11:40 AM

[ETFdesk.com:]

interesting, saw this on Reuters: Jim Rogers wary of buying gold at new high bit.ly/k0Dl

Oct 07 11:56 AM

[Arthur Hau:]

Opps, I just checked the trade volume of Comex Gold Dec. It is only 120,834 lots (and it's already 1:30). Not a good sign for the bulls!

I was a bit worried about gold hitting $1,100 in a few days because of the irresponsible report by Barclay. However, thanks to Australia, the gold rush can never be realized! I am waiting for New Zealand to send out another good news soon!

The European Central Bank itself expected 0.2 percent growth for 2010, revised up from its previous prediction of a 0.3 percent contraction. It may not raise interest rate in the coming month. However, I expect them to follow suit early next year!

Can Barclay beat the high interest cycle? Please don't become a second Lehman!

Oct 07 01:35 PM

[Genesis:]

Why did you buy those particular stocks?

Oct 07 02:41 PM

[Genesis:]

That's just because of his investing style. He never likes to buy all time highs in anything. This was 99.9 percent predictable.

On Oct 07 11:56 AM ETFdesk.com wrote:

> interesting, saw this on Reuters: Jim Rogers wary of buying gold
> at new high bit.ly/k0Dl

Oct 07 02:43 PM

[Gold Bug:]

Gold Rise to Record $1047 an ounce today
source :
goldbasics.blogspot.com

Oct 08 01:21 AM

[Laurence Hunt:]

Gold has plenty of boundaries on the upside, but if you look at the trending channel, it's been edging along the low side until recently. There is certainly much room to move from here.

Oct 08 03:16 AM