Return of Volatility Triggers Buying Opportunity in Gold

After a prolonged period of low volatility across the public markets, investors seem to be getting skittish thanks in part to the increasing number of concerning stories such as those that have plagued shares of Facebook, Inc. in recent weeks. When volatility spikes, it is a natural tendency for investors and long-term traders alike to shift capital to traditionally stable sectors such as precious metals. In this article, we take a look at gold, which is the favorite of the group, and try to determine how to profit from the newly established trading environment moving forward. (For more, check out: Precious Metals Pullback Suggests It Is Time to Buy.)

ETFS Physical Precious Metals Basket Shares

When active traders want to analyze the performance of precious metals, they often look to exchange-traded products such as the ETFS Physical Precious Metals Basket Shares. As you can see from the chart below, the price has tested the combined support of the horizontal trendline and the 200-day moving average several times in recent months. Monday’s price action suggests that this level will continue to provide traders with a lucrative risk/reward setup, and it could prove to be a very timely entry for those willing to assume risk. From a risk management perspective, stop-loss orders will likely be set below $64 in case the bounce off the technical levels fails to materialize. (For further reading, check out: Now Is the Time to Buy Gold and Silver.)

Bullish chart patterns of key gold-related ETFs suggest that now could be the ideal time to buy. …read more

Read more here: Return of Volatility Triggers Buying Opportunity in Gold

Category: FB, GLTR, GLD, GDX

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