April gold has appeared to establish itself as a safe haven asset after extreme amounts of volatility over the past week. When investors pushed stocks down to well over 1000 in the Dow, gold, actually fell in the biggest sell-off in one day since 2013. At one point it was down over $73! Despite this contrarian reaction gold is now reaching for the stars as we near $1700 on the front month April contract. As I stated in my past article on gold, investors should be using extreme caution in this market as panic seems to set in each day pushing gold volatility well beyond the norms. Options are now expensive, and for a reason. Gold going higher still needs to be the trade, but how you structure this is dependent on risk appetite.
There are a number of strategies that have low risk and moderate reward and give investors exposure to a market that could easily push toward all-time highs of $2000. Although I am not aggressively bullish just yet, anyone who says that “gold can’t go there or can’t trade like this forever” clearly has not been in futures trading for long. These are turbulent times and rather than sit on the sidelines, try options strategies or some of the smaller gold futures contracts (10, 33, 50, 100 OZ are available to trade) to get exposure during the corona virus epidemic.