The Midas metal is poised to do well, as central banks and sovereign nations open up the monetary spigots to full. The classic Seinfeld moment above came to mind.
As you can see on my daily candlestick chart below, gold has roared back from a test of the positive influence of its longer-term moving average line. Recent forced selling was met by demand. That is shown by the long and strong red candle lines.
Chart by Steven Sarnoff, h/t stockcharts.com
Neel Kashkari, Minneapolis Fed head, whose name reminds me of “cash and carry” futures trades, who gained fame/infamy for his role in the bailout from the 2007-2009 financial crisis, said the quiet part out loud near the conclusion of his segment on 60 Minutes this past Sunday.
Scott Pelley: To the person who is about to grab their car keys and go to the ATM and take out $3,000, you say what?
Neel Kashkari: You don’t need to. Your ATM is safe. Your banks are safe. There’s enough cash in the financial system. And there’s an infinite amount of cash at the Federal Reserve. We will do whatever we need to do to make sure that there’s enough cash in the banking system.
“The legacy of negative interest rates. If I pay you to hold my money, I am declaring my money unsound. The gold price agrees.”
— Chris Carolan, @spiralcal
The fact that investing in gold doesn’t pay interest has been a strong argument against the Midas metal for ages. But the spreading of calamitous negative yields, as sovereign nations apply beggar-thy-neighbor policies to push on a string and debase their currencies in hopes of spurring slowing economies, sparked gold to reach 6-year highs earlier in the week.
We shall see if there are any winners in the race to the bottom. Gold is affirming its historic role as a store of value.
“Superleverage, it’s the only sensible way to speculate.”
— Paul Sarnoff
With Comic-Con in town, this struck me as a natural subject. Superleverage is the art of profiting from changing prices, with limited risk AT ALL TIMES, without ever getting a margin call, asked to put up additional funds, or forced to liquidate your position.
The instruments of Superleverage are exchange traded put and call options.
Buyers of puts and calls are the ONLY ONES who possess the full profit power of Superleverage.
The Superleverage power of our method was on display again today, as our call on Barrick Gold Corp. (GOLD) closed +296% in a month, with an always known and strictly limited risk!
The underlying shares have made a nice move, from $13.89 to $17.35, propelling our recommended GOLD September $14 call option from $85 to $337!
“Folks using intraday charts to call the top of a gold move that is unfolding on monthly charts is hilarious. Y’all are doing it backwards!”
— Chris Carolan, @spiralcal
Options Hotline Update, FYI: Our recommended Father’s Day call on Barrick Gold Corporation (GOLD), emailed Sunday evening to our subscribers, triggered 06-17-19 at $85 with GOLD at $13.86, traded 06-21-19 at $206 with GOLD at $15.68, +142% in 4 days on a 13% move in the underlying shares, with an always known and strictly limited risk!
That’s the Superleverage power of my method on display. If this is the type of options action you’re looking for, subscribe to Options Hotline today to see how we stay a step ahead of the crowd.
The character of the behavior of price movement in gold is telling us a big longer-term breakout is in play. Former resistance (supply) now represents underlying support (demand). The strong red candles on my weekly chart above depict this vividly.
It’s important to view price movement from different time perspectives: monthly, weekly, and daily. Consider the lines of average price movement, along with price movement irrespective of time and you begin to approach a complete picture.
“We typically trade our beliefs about the market, and once we’ve made up our minds about those beliefs, we’re not likely to change them. And when we play the markets, we assume that we are considering all of the available information. Instead, our beliefs, through selective perception, may have eliminated the most useful information.”
— Van K. Tharp
You are the most important factor in your success. Understand and overcome your biases. Use a trading system that’s right for you.
I believe that mind, method, and money management are the cornerstones of your complete game plan for trading success.
FYI: Our latest option recommendation, on Barrick Gold Corporation (GOLD), is trading +30% in one day on a 2% move in the underlying shares, with an always known and strictly limited risk!
That’s the Superleverage power of my method on display.