The gold trade seems to be a little too easy recently, incrementally working its way higher since putting in a low of $1,677.30 on March 31st. Or is gold finally behaving the way one would expect in an inflationary environment? Who cares? Go with the trend! Use the chart and track the US Dollar. I fully expect the rally in gold to continue even as I would expect that the treasury yields in the ten-year notes to rise. The shock of the sharp rise in rates is over. There has been a necessary pause and much debate about rising rates and the prospects of inflation. Inflation is real and gold likes inflation. Gold should not have too much difficulty breaking out above $1,900, especially as the Dollar looks capable of testing .8900.
So, yea, it looks like an easy trade right now. It’s a friendly trend. Remember the adage, “Don’t confuse a bull market for genius”. More importantly, remember to practice good risk management when trading commodity futures. Use options or stop loss orders. Work with a professional.
I’m bullish metals and commodities in general as we have too many dollars chasing too few goods. Gold is assuming the leadership roll once again. Keep it simple!