There’s Still Time Left For This Simple Gold Trade
Kevin McElroy: If you’re a gold (NYSEARCA:GLD) investor, you probably have a bad taste in your mouth, and I don’t blame you.
Gold stocks have gone nowhere for what seems like years.
Gold itself hasn’t moved much in the past year.
So you’re probably sitting on the sidelines, waiting for something (ANYTHING) to happen to buy more, or maybe even to cut your losses.
But there’s always something you can do.
I’m not advocating trading. I think it’s a great way to lose money quickly if you don’t know what you’re doing.
But there’s one trade that I actually like in the precious metals world. It’s not a super quick-moving trade that you need to watch every day, or even every week. But it can give you 10-30% gains pretty easily when it gets set up.
Right now, we’re in the middle of that set up.
I’m talking about the gold-platinum trade.
I’ve talked about it before. And the last time I pulled the trigger on this trade for myself I made 12% in a few months – not terrible while we wait around for gold stocks to catch fire.
The premise is simple: platinum is almost always more expensive than gold (for a variety of reasons). But right now, it’s cheaper than gold.
The trade? Buy platinum (I prefer the ETFS Platinum ETF (NYSEARCA:PPLT) and hold it until the trend reverses back to normal.
Since we know gold and platinum are both in long-term bull markets, there’s little risk of both metals falling very much during the course of this multi-month trade.
I like this trade because it’s simple, it has almost no chance of losing much (if any) of your money, you don’t need to watch it like a hawk, AND it distracts you from how terribly boring the gold markets have been.
Full disclosure: I currently own PPLT and plan to hold it at least until gold is less expensive than platinum for a full trading week.
Kevin McElroy is a top rated commodity researcher and analyst specialist at Wyatt Investment Research, with a targeted focus on short and long term investment opportunities. He has worked in the investment publishing field for over three years alongside some of the world’s leading commodity traders and analysts. He takes the complex futures and options trading strategies from the floors of the Nymex and the CBOT, uniquely combines them with economic trends and positions his recommendations in a way that any investor, from a straight long-term buy and hold investor to a sophisticated day trader can easily understand, implement, and profit.
Kevin constantly finds unique ways to profit from the “real stuff” like oil, gold, iron, corn – the energy, money, goods and food that the world constantly needs more of. Kevin is the daily editor to Resource Prospector and a contributor to Energy World Profits and Global Commodity .