Thursday, September 17, 2009

Is it Time to go Short Gold Futures?

It seems like everywhere I go the topic of gold comes up. Financial news carries the crawl across the bottom of the screen with the countdown to $1,000 for gold, commentator’s trade guesses about how far it will go and virtually everyone is sending in grandmother’s old broach to some PO Box to get a check. Should we care? Further, as I listen to the advertisements from gold investment groups hyping how “there has never been a better time to buy gold” Where were these ads in 2000 when gold was at $255? That was the time to trumpet the call to buy gold. I wonder, is now the time to short gold?
Realistically, doesn’t it seem more logical that we are closer to a top than a bottom? I get the philosophy that the world is ending and the dollar is worthless and gold is our savior, but us a trader this looks more like a top than a bottom. If this was corn, we would look to sell, not buy. With all the bumps against and only slightly through $1,000 I think it may have run out of gas and has a better chance to go to $700, than $1,500.

Futures trading involves substantial risk and is not suitable for all investors

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