Gold Trading – All is gold, does not glitter, Sellers in control.
Let’s get to the gold charts. Remember, when selling occurs in gold and there is volume there is fear in the market that will normally cause the selling to continue.
Gold sellers have moved in. There is a lot of different stories out there as to the timing of gold prices and the selling of Gold by Cyprus. Sort of a punitive measure for them using their only capitol reserve to pay off Banks that didn’t know when to stop lending. Too bad once they sell then they will have no real Capital Reserves.
1478 looks like the short term support. Watch as sellers can either panic or pull back for a small retracement to 1500.
Once 1478 is broken the next major support is 1381.
A more logical support will be the psychological support that will come in at 1400.
GLD the Gold ETF is showing the same weakness with a thin bid giving sellers push in this market.
Downside support is 142. but looking for a Gap down to around 140.50. The next major support if it breaks here is 136 to 138 area. Watch this at the open as another influence in the over night is some support in the Japanese Yen pushing the Dollar index up.
Watch yourself as this is a volatile market, it is best not to trade this type of volatility unless you have tested the market and set up a specific trade strategy for this type of Move.
Gold Trading – Either short the futures market or use in inverse ETF like DUST
So the question is for most stock traders and retail that aren’t familiar with ETF’s is “How do you make money on Gold when it goes down?” DUST is the triple inverse Gold ETF that is tied to mining stocks. There are a few others you can watch too like DGLD which also has Treasuries tied to it, and the three inverse ETF’s that are supposedly tied to Physical Gold trading – GLL (2x inverse), DZZ (2x inverse ETN), and DGZ (1x Inverse ETN).
For Dust, we are looking for a break of Golds highs, not looking for a double top here, as there could be some resistance as this moves to breach the resistance line. Targets on the upside, First target, 82 and there could be a possibility of an add on to 86 – 88. Watch for a gap up on the open.
List of Gold Inverse ETF, ETN
DUST Gold mining Stocks 3x inverse ETF
DGLD Gold and Treasuries 3x inverse ETN
GLL Physical Gold 2x inverse ETF
DGZ Physical Gold 1x inverse ETN