Thank you Wags. I'll look hard at that. Been short 700 puts and long 900 calls for the past 3 or more months. I haven't made a trade this year. I agree with the earlier poster who said there probably hasn't been a better fundamental reason for being long in 100 years. It's not just because of implied inflation-that's a guess after all-but because ST rates are so low there's no penalty for carrying a non interest bearing investment. Granted I'm not long because of fundamentals-I know as little about women's figure skating as I do metals-but I bought gold because sentiment sucked at $700 and because gold remained semi-buoyant against most everything else on a relative basis. I'll give a few devils advocate reasons why I'm long. 1. While crude lost 80% of it's value and silver 60% in one of the biggest forced deleveraging periods in market history-gold held tight with a token 30% break. IMO if gold wanted to break wide open it already had it's chance. 2. Gold has continued to rally on dollar strength-quite counter intuitive to it's pattern throughout most of the decade. When relationships decouple I don't expect mean reversion-I expect pain for those who stubbornly cling to relative valuation dogma. 3. I'm cognizant that even if gold is macro bullish it could still fail at $1000 a few times. We could be establishing a trading range top that will need additional bullish information before it's penetrated. I wish I were smart enough to know when a swing high is formed-I'd be King Midas-but the easiest way to stay with it is the way I'm positioned-via a naked collar. (is there another name for this short put, long call strat?) Been a hard position to add to-I haven't-because as we all know this stuff could break $80 from here on air and rally right back on short covering. I'm continually enthused by the manner in which shorts get killed by selling $20 rotations off of swing highs. OTOH those shorts might sooner or later work. Irregardless there a zillion other things I'd rather short than gold. One last observation: A good friend said something perceptive just yesterday. You hear of NO ONE saying "I'm shorting crude at $43" even though selling energy upticks has worked- yet traders want to short any market that's actually bullish. Little wonder why so many traders lose......
First of all, a jeweler is not a bullion dealer. Second of all, it is their job to win. Apparently you finally figured out the concept of a dealer in business. Third of all, the bid-ask spreads at the bullion dealer, a good one, are a not gigantic at all. And if the jewelers are asking all their customers for gold, it is because there is demand. Wrong, you don't know what you're talking about. That's your local ghetto pawnbroker you are mistaking for a jeweler. You obviously cannot tell the difference.
Could this disconnect be the product of people all over the world looking at Gold as a hedge against any fiat currency? Instead of a hedge against a falling $USD...
gold is breaking out is many other non USD pegged paper. sure there's a Feb.-Mar. seasonal weak period but it's a set up for a summer rally into June. relax and pour yourself a Scotch.
I learned a lesson shorting oil too early. Knew the pig was overvalued and still got my nuts chopped off. Super spike to 200 my ass. Lost 20% and couldn't take the heat as it continued to rise. (recouped much more later ) Wait for down trend to develop.
it takes 4.4 shares of Ford Motor to buy a Mickey D's happy meal and a large Coke. the only thing we have to fear, is fear itself.
I learned that same painful lesson: shorted oil at 90, covered at 110. It's hell being right, but early.
Because you can always make more on the long side percentage-wise than you can on the short side. Assume your leverage or cash at risk is equal for both trades in this example. If you short the dollar and it loses 50%, you've made a 50% profit. If gold doubles, you've made a 100% profit. And to those who are convinced gold has to go down from here because they think everyone is bullish, it reminds me of the go-go '90s when guys I knew were shorting stocks like AMZN at $200 because they knew it was way overpriced and too much bullish sentiment, only to have it smoke them as it went to $400. Gold will be a screaming short when we have a true bubble in it and it has completed its parabolic ascent. Until then, you might pick off some quick profits from a short term pullback, but the big money will be on the long side.
Wow. This brought back memories. I remember shorting YHOO and getting my azz handed to me. Finally I went long some calls and it was one of my best trades ever. If I recall correctly it was when they were going to add YHOO to the SP500. It went up something fierce in a couple of weeks. It had to be at least 150 points. LOL. Damn, those were the days.