Gold Could Take a Breather. Time to Place Some Stops

The guys at MarketClub have been all over the move in gold and initially outlined a price target of $1,110 for the precious metal. Well that target was hit a few days ago and in their latest gold technical analysis video they see gold 'flattening out' a little bit as it could likely consolidate and trade sideways for a while before continuing its trend higher.

They note that it's always prudent to lock in some gains and protect them by using stops. If you're a longer term player in the metal, you can use more flexible stops and they suggest placing one below the most recent low at around $1,030 or so. If you're playing this as more of a shorter-term trade, then you'll obviously want to lock in your profit quicker with a more conservative stop right around $1,095 or so. Watch the video to see what they say about placing stops in gold.

They also highlight that you should move stops up as the market heads higher to continue to lock in gains. The pattern in gold that built up over multiple months is a powerful base that could propel the precious metal to their price target of around $1,250-1,300. If you're not playing the metal directly, keep in mind you can play the popular exchange traded fund GLD. Hedge fund manager David Einhorn of Greenlight Capital prefers storing physical gold, while John Paulson's fund Paulson & Co has bought $4.3 billion worth of gold investments. Either way, the guys at Market Club see gold cooling off for a bit here before setting up for another run higher.

Comments

[yellowhoard:]

If you're a longer term trader, you'll know that this is a BIG secular move.

Buy it and forget it until we get to Dow/Gold equivalence.

Nov 13 06:19 AM

[mc2406:]

Stops might no protect a flood of overnight selling. Consider protective puts as well. Also, they might not take you out of the trade in case of a a short term blip.

Nov 13 09:15 AM

[kohalakid:]

The Open Interest on Dec gold is down almost 50,000 lots in the last week or so.
That represents almost 5 million ounces of gold.

The decline shows shorts are covering by buying from willing long sellers.

Short covering rallies can be fast and furious, but the caution this article advocates seems very prudent. Long term bull markets can't be built on short covering.

Nov 13 11:12 AM

[sorgmot:]

Longs, watch out.
We doubt it is wise to relinquish your long positions in gold and its derivatives.
We expect upward creep in them this week.
Then, a short 3 trading day decline.
Then a month long rally into year end to higher levels.

We are long gold miners.

Watch out for tricksters of all kinds with interests to protect.

See your advisers and make your own decisions. .

Nov 14 09:54 AM

[5142152-337:]

Some sage advice and some stupid comments as well in the above posts. I bet you can differentiate between them, right?

BTW, does anyone out there have the PROOF that "we" hold 8.3333 tonnes of gold reserve? I'd love to see it. Oh, China doesn't count as an answer....

Nov 14 03:55 PM