In short, I think that taking profits off the table, and closing our long positions right now is justified from the risk to reward point of view.
At the same time, I think that re-opening short positions in GDXJ (or buying inverse-trading ETFs such as JDST, if one seeks leverage) is also justified from the risk to reward point of view.
In my opinion a big (300% of the regular size of the positions) short position is justified. Of course, the final decision regarding any trades is up to you – it’s your capital, and you know best what kind of position you’re fine with.
Congratulations! It was not easy to gain on a long position during a sharp medium-term decline, but you managed to do it. This is yet another profitable trade in a row. And the biggest part of the move is – in my opinion of course – still ahead.
Why am I making the switch now? At the moment of writing these words, the GDXJ ETF is trading at $33.50, which is just $0.37 away from my previous binding profit-take level, and at the same time the gold hit its Dec. 2021 low. Plus, silver just materially outperformed gold, which might be an indication of a top. This indicates that even if this is not the final top, we’re probably very close to it.
Tomorrow, inflation numbers (core PCE) will be released, which might make the market think that the Fed will not be so dovish after all. And thus, the very recent rallies in PMs could be reversed. The thing is that those inflation numbers are going to be released one hour before the markets open in the U.S. Consequently, while futures traders might be able to easily get out of the market, if it seems that the trend reverses, it might not be that easy for those in GDXJ and leveraged ETFs, as they will not be trading (and the pre-market trading might not provide decent liquidity). Therefore, in my opinion, it seems justified to take profits off the table, and switch positions right now.
As always, I’ll keep you – my subscribers – informed. Congratulations once again!
Przemyslaw K. Radomski, CFA
Expert gold analysis
Today, gold stocks continue to hold immense value, not just as a financial asset and a hedge against economic instability, but also as a cultural and symbolic entity. Gold is way more than just a metal. Gold's presence in technology, space exploration, and medicine, alongside its traditional roles in jewelry and investment, reflects its enduring legacy. Gold is more than a metal.
At Gold Price Forecast, we live and breathe gold. Or, on the more tech-savvy side, we analyze it, discuss it, and provide you with the best information and insights so that you can benefit from buying and selling gold stocks.
Get to know gold better
Gold has always carried special meaning for humans. From the Egyptians to the Inca, civilizations across the world revered gold not just for its beauty but also as a symbol of power and divine grace. The Egyptians, for instance, believed gold was the flesh of the gods, and used it extensively in their sacred tombs and temples.
Economically, gold played a crucial role in shaping early monetary systems. It was the standard medium of exchange for international trade, with its intrinsic value recognized universally. Gold's stability and scarcity made it an ideal anchor for currencies, leading to the Gold Standard, which many countries adopted in the 19th and early 20th centuries.
The allure of gold spurred significant historical events, such as the Gold Rushes of the 19th century. These migrations shaped the demographics and economies of nations. The California Gold Rush, for example, was a pivotal event in American history, leading to rapid population growth, infrastructure development, and eventually, statehood.
One industrial revolution after another, the yellow metal still holds prominence. At Gold Price Forecast, a part of the Golden Meadow® platform, we're here to help you understand the value of gold and to support your success - not only as an investor.
Gold analysis 101
Not all that glitters is gold - easier said than done. This is the reason we don't trust just the first glance. Instead, our analyses are built using dedicated financial instruments for gold rate prediction and investment. Each day our gold analyses are sent out to subscribers via the Gold Price Forecast newsletter.
Technical analysis in financial markets is grounded in past data to predict asset price movements. It examines historical gold stock price and volume data to identify trends and patterns, assuming that these factors encompass the most relevant information for investors. The methodology stipulates that specific patterns in the rate of gold and volume tend to recur over time, guiding gold futures price predictions.
While examples can illustrate this approach, real-world scenarios often involve more complex patterns, integrating volume and broader market data. Technical analysis utilizes a range of tools like support and resistance levels, trend analysis, and volume studies, among others, to analyze various assets and market conditions.
In gold stock investing, technical analysis takes on a significant role due to gold's unique nature. Unlike cash-generating assets or commodities, the gold value is not based on intrinsic properties but on relative pricing. With no cash flows and only a small percentage of gold used in industry, gold valuation leans heavily on market sentiment and perceptions. While fundamental factors influence the gold rate, they do so through investors' perceptions, making technical analysis a key tool for identifying recurring market moods and patterns. This approach complements fundamental analysis, offering a broader perspective in understanding and predicting gold price movements and gold stocks.
Gold is a lot, but here's even more
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We aim to simplify the abundance of information available in the realms of finance and personal growth. Sifting through this vast amount of data can be overwhelming, which is why we've melded the best of both worlds. Our unique approach combines investment expertise with insights into wellness, offering a comprehensive guide to holistic investing.
Gold Price Forecast offers detailed analyses of gold value, gold stocks, and investment strategies. Through Golden Meadow®, we connect gold investors with a community that shares an interest in understanding gold market trends. Membership in Golden Meadow® opens doors to a wealth of resources. You'll have access to webinars led by gold experts, video and audio podcasts on financial well-being, courses on managing trading stress and risk, and the opportunity to interact with passionate instructors. These resources are designed to help you find the perfect balance between successful investing and personal growth.
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Take a walk on the golden side
At Gold Price Forecast, we're all about delivering the Golden Standard for insightful and reliable gold value analysis. Our expertise shines in precious metals, particularly in gold predicting - that's where we thrive. However, we believe true success encompasses more than that.
Gold is a solid bet, but there's so much more to life than just gold rate charts and market graphs. That's the beauty of being part of the Golden Meadow® community. It's about striking the perfect balance between boosting your financial health and nurturing your well-being. It's an experience that's as rewarding as it is enriching.
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