Gold Comes Alive on Safety Buying
A couple of quick notes are in order. We exited our trading position in U.S. Steel (X) today after our stop-loss at 23.50 was violated on an intraday basis. While most metals and mining stocks have held up fairly well under the recent broad-based selling pressure, steel stocks were among the few that showed weakness. SELL
On the precious metals front, gold has shown significant improvement as safe-haven demand has notably increased in the face of a weakening stock market and U.S. currency. Additionally, geopolitical tensions surrounding the situation in the Ukraine are another reason for the increased safety interest in bullion—especially after U.S. Secretary of State Antony Blinken intimated today that Russia could soon launch a new attack on Ukraine.
Additionally, gold’s confirming indicators platinum and palladium were up 5% and 7%, respectively, which suggests this is more than just a gold short-covering rally.
With several of gold’s supporting factors back in play, I’m going to move our favorite gold-tracking fun, the GraniteShares Gold Trust (BAR), back to a buy. Participants can purchase a half position in BAR here using the 17.75 level as the initial stop-loss. As with our previous trade in BAR, I’m recommending a fairly tight stop since a violation of this level would imply a total reversal in buying interest (hence a “head fake” situation). BUY A HALF