I have to laugh at how quick sentiment on wall street these days changes, it literally changes by the second where as 20 30 40 50 years ago it changed by the year or decade, meaning just recently everyone was saying gold was going to collapse etc etc etc, it was going to break $1000 and continue its sell off, fast forward and this is the article cnbc has posted today
so now its time to buy gold? hmmm
Gold rally could be similar to 1980: Trader
Amanda Diaz |
@CNBCDiaz
Gold bugs are finally getting a bid.
Prices of
Gold continued to rally Thursday, rising more than 1 percent to a four-week high as uncertainty over a possible
Fed rate hike had investors piling into the safe haven asset. The precious metal is now up more than 6 percent from the recent low hit in late July and some traders think now could be its time to shine.
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Gold at 1-month high after Fed hints Sept rate hike is less likely
On Wednesday, when options volume in the SPDR Gold ETF, the
GLD, ran 1 ½ times its daily average, one trader bet nearly $250,000 that the ETF could continue to rally over the next two weeks. Specifically, that trader bought nearly 12,000 of the Sept. 4 weekly 112-strike calls for 20 cents each. Since purchasing a call option allows a trader to buy a stock, or in this case ETF, at a certain price for a given time, this is a bullish bet that the GLD will rise above $112.20 by Friday, Sept. 4.
"The is one of the first times in a while that we've seen options traders bet on a rebound,"
Mike Khouw, a CNBC contributor, said Wednesday on CNBC's "
Fast Money."
Bullion has been a notoriously tough long, as a strong
U.S. dollar and
stock market have pushed the yellow metal down nearly 20 percent since August 2013.
"We don't quite know how this will end," added Khouw. "But if gold's bear market is similar to the one in the early 1980s, it may still be marked by some significant rebounds."
Khouw noted that from its peak in 1980, gold fell 40 percent, then found a bottom and rallied only to sell off again. "This bear market could easily do the same even if it does ultimately go lower."
Gold is down more than 3 percent year to date and is on track for its third consecutive year of losses.
