Declining volatility levels over much of the past month have perplexed investors due to factors such as the heightened possibility of military conflict in regions such as North Korea. The trend toward complacency by so many retail investors seems ill timed, especially given this type of fundamental catalyst, but also because of the upcoming Q3 earnings season.
It seems like a flock to safety and an accompanying increase in volatility is something that active traders and investors should seriously consider. In this article, we take a look at the state of precious metals, as this will likely be one of the primary commodity segments that will benefit should investors start to seek stability. (For further reading, see: 3 Positive Long-Term Charts for Precious Metals.)
SPDR Gold Shares Gold bugs had much to cheer about in early September when the price of the SPDR Gold Shares broke above a key level of resistance. Unfortunately, the breakout was short lived, and like the chart of the Volatility Index (VIX), the price of GLD has dropped back down toward the support of its long-term moving averages. While the pullback may be frustrating for the bulls, it could also be used as an opportunity to increase positions while the risk/reward setup is clearly in their favor. Active traders will likely look to place their buy orders as close to the 200-day moving average as possible and set their stop-loss orders directly below $118.55 in case the selling pressure continues for longer than anticipated. (See also: 3 Positive Chart Patterns for Precious Metals.)
A pullback toward major support on the charts of these metals-related ETFs suggest that now could be the time to buy. …read more
Read more here: Precious Metals Pullback Suggests It Is Time to Buy
Category: GLD, GLTR, SLV