Is Gold Headed Higher in January?

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Mike Hammer | January 6, 2020 10:37am NYSE:GLD

NYSE:GLD | News, Ratings, and Charts

Back in December, we collected some predictions for gold. Of course, such predictions are mostly smoke and mirrors, because no one can predict the future with tremendous accuracy all the time. But they are nonetheless interesting and attractive because we are humans and humans want to think they know what’s coming. We won’t name names here, just so we don’t inadvertently embarrass anyone.

Predictions from the big-boy analysts ranged from 1525 to 1580 on the high side, or in other words just a slight bump up from 2019 highs. Being conservative is often a safe bet if you’re trying to preserve your cushy office job; after all, finding reasons to support the status quo is a survival strategy that works “most of the time”.

Individual investors apparently see a different picture.  BullionVault ran their own poll which found a consensus of “30% higher than 2019”. (https://www.thisismoney.co.uk/money/markets/article-7851925/Experts-forecasting-big-gains-bullion-Heres-STRIKE-GOLD-2020.html)

Using 1500 as the basis, that would be a peak of 1950 in 2020.  Just a wee tad higher…

Since gold popped on the US-Iran tangle, new predictions are popping out like crazy. The latest came out yesterday, putting a peg in at $1675. That would be a lot more interesting if it wasn’t for BullionVault’s survey.

Overseas, gold hit new all-time highs in India, with the combination of geopolitical instability and a sinking rupee. Dubai’s exchange (the DCGX) reported new annual records for trading volume last year, demonstrating yet again that gold is not an ancient relic but still has major significance in today’s world.

Your friendly Gold Enthusiast doesn’t like to make predictions, he would rather trade the market as it comes. Since 2020 has already produced one brand-new geopolitical instability – in the form of a US-Iran fight – it would seem like a good time to keep our mouths shut as far as predictions go, trade the short-term for now, and try to keep some cash available for opportunistic trades. The fundamental picture hasn’t changed, just the geopolitics, so if those calm down soon gold is likely to fall right back into its December range.

Signed,

The Gold Enthusiast

(DISCLAIMER: No securities were mentioned in this article. The author is long the overall gold sector via positions in NUGT, JNUG, a few junior miners, and covered calls on part of the NUGT and JNUG positions. The author may trade options positions in NUGT and/or JNUG in the next 48 hours if market conditions warrant but has no plans to make any other trades in the gold sector in that timeframe.)

 


The SPDR Gold Shares (GLD) was trading at $148.14 per share on Monday morning, up $2.28 (+1.56%). Year-to-date, GLD has gained 19.81%, versus a 21.08% rise in the benchmark S&P 500 index during the same period.

GLD currently has an ETF Daily News SMART Grade of B (Buy), and is ranked #1 of 33 ETFs in the Precious Metals ETFs category.


About the Author: Mike Hammer

Mike HammerFor 30-plus years, Mike Hammer has been an ardent follower, and often-times trader, of gold and silver. With his own money, he began trading in ‘86 and has seen the market at its highest highs and lowest lows, which includes the Black Monday Crash in ‘87, the Crash of ‘08, and the Flash Crash of 2010. Throughout all of this, he’s been on the great side of winning, and sometimes, the hard side of losing. For the past eight years, he’s mentored others about the fine art of trading stocks and ETFs at the Adam Mesh Trading Group.


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