PARIAH COMMODITY – THE GOLD

Recently one of the most hated and most forgiven commodity is the gold. After a decade of honeymoon, when everyone loved the gold and all the media was covered by gold related news. That was a real bubble with a great hype to own gold. The houswives and grandmas get started to own bullion.

Finally as all great rallies end by a big fall. It was the year of 2013 with a bigger drop than 30%. Last year, gold had the largest annual decline since 1981. Nobody wants to buy and own the gold anymore and nobody speaks about it. It is far not the favorite commodity of traders and investors anymore. Everyone waits for a bigger correction in the following couple of years. Honestly I don’t know where the knife hits the ground. But...

I have a theory if everyone agrees something else is bound to happen. That’s why I am always looking for forgotten and undervalued markets like now the gold market. I look at closely now at gold because since December recovered again. I guess this is a good „dip the buy” opportunity. Gold has rebounded from the six-month low of 1.182$ on 31th December.

The market could turn down again, we never know. Due this option we just started to buy after Xmas the gold with small positions just to test the market. We made nice profit, more than 1,7% on gold so far. In Q4 2013 sell off trend was violated in beginning of January, which is a clear break out signal combined with a head and shoulder pattern. My expectation the price is going to hit 1.290$ the first key resistance level.

The BFM Assets Team.