Serge Berger: Trade Gold, But Don’t Hold It
Head Trader & Strategist, The Steady Trader
Most investors have a choice of looking at gold as either a long-term holding and diversification play, or something to trade within a multiday/multiweek time frame.
Those with the former position have hopefully been taught since the top in 2011 that gold, just like any other asset class, can move down as well as up. For the more trading-oriented crowd, the SPDR Gold Shares (GLD) ETF has offered plenty of opportunities in recent years, but one had to keep the trend (lower) in mind.
When looking at gold, one cannot look at it in a vacuum, but rather must consider its relative stands vs. other asset classes. Considering that we are in an environment where equities look to be trading toward the end of a cyclical bull market, but in the beginning of a secular bull market, while interest rates are trending higher, I continue to see the trend lower in gold for 2014.
From a trading perspective however, I expect to see at least one good bounce in gold in 2014, likely when folks realize growth has been slowing at the margin, which would then usher in a 5%-10% correction in equities.