Clive Maund on Kitco commentary called this week's drop in spot gold in his Monday 8/14 article with charts. The XAU chart is a Rorschach test of sentiment. Some might see an ominous head and shoulders top forming. Some see the pennant that Maund writes about. Some see the uptrend intact and connect the dots on the lows. The first interpretation is bearish, the second neutral, the third bullish. Depending on which camp a person leans towards each has its merits.
As always price action is where the rubber meets the road. Pennants tend to be boring for most traders as the price swings get smaller and smaller as the point is formed. However, this is exactly the kind of a price action that buy/write strategies work well. Option premiums do reflect that diminished volatility so profit potential is limited.
KGC Kinross has held up well considering the decline in gold prices (chart). My purchase of a couple of physical gold coins could definitely have been timed better. The price went up for a couple of days but is now a good $25 an ounce lower than my buy times.
No comments:
Post a Comment