Huge rotation out of the market and into metals today. Do you think it's another headfake or is it for real?

Question

Gold up over $30 today...biggest one day move in 26 years.

I think gold is the real deal and will continue higher as the market continues lower but most "experts" seem to think gold is headed much lower. Thoughts? opinions?

Answer 1

I am long and have protective puts in case of pullbacks. Generally, gold is down in the summer. With inflation and declining dollar and oil at $140 a barrel, I believe gold will go higher.  However, I would not commit a large amount of funds at this level. I stick with options in both the commodity and stock markets. I wouldn't go long a futures contract--too much $ on the line. If you want to hold physical gold, check out www.golddealer.com. I thought they were fair and reputable, and had no trouble completing my transactions.

Answer 2

It is a short term play in reaction to the Fed's statement. Gold is a defensive play when inflation and a weaker dollar are a concern.

I think gold will never break a 1000 this year.