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Gold looks ready to challenge all-time highs
Topics: gold, macro, trade ideas
A few weeks ago, gold looked like it was headed south. For several days, the gold ETF (GLD) hugged the bottom of its trading channel, and appeared as if a breakdown was imminent.
But today’s action changed the picture entirely. The high-volume 23 point rally shot gold through the upper bound of congestion. Dozens of gold and silver stocks, from junior miners to majors, look like they may be starting significant moves upward.
There are many fundamental reasons why gold could be strong, but at the end of the day there is only one thing I care about: today’s action leaves gold within 8% of all-time highs (pdf chart courtesy of Moore Research). It is knocking at the door, and I want to have significant positions on in case today portends the start of a violent rally to new highs. This is not a slam dunk, and may only be a 50-50 proposition. However, the potential upside is too significant to ignore.
There are three ways I am playing the move: (1) gold and silver futures; (2) junior miners; and (3) somewhat larger silver stocks. Here are a few stocks I bought today:
Golden Star Resources (Amex:GSS)
Claude Resouces (Amex:CGR)
Banro Corp (Amex:BAA)
U.S. Gold (Amex:UXG)
New Gold (Amex:NGD)
Rubicon Minerals (Amex:RBY)
Yamana Gold (NYSE:AUY)
Coeur D’Alene (NYSE:CDE)
Pan-American Silver (Nasdaq:PAAS)
DISCLOSURE: Long gold, silver (via futs), PAAS RBY NGD UXG AUY CGR BAA GSS
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