How To Trade Gold Amid Potential ‘Double Bottom’ In Prices
In the bigger picture, gold is up about $70 from the lows in the $1,180s from late last year. Those lows, of course, essentially matched the cycle low put in on June 28, 2013, at $1,180.50.Thus, from a technical perspective, gold may have put in a “double bottom.”
However, we can only be certain of whether that’s the case in hindsight. Prices may retest those levels in the future, or they may continue to climb above $1,300. There’s no way to know for certain.
Our suggestion is to accumulate positions at breakout points. If gold revisits sub-$1,200 levels, a trader can buy, but should quickly cut positions on a breach of $1,180.
In that same vein, a move above $1,300 would signal an upside breakout and may be another opportunity to buy. But nimble traders should be ready to exit should the breakout prove unsustainable.