Hi, in yesterday’s live session one of the things we looked at was gold and I am very bullish on buying the physical metal BUT you need to be careful where you buy from, how and what to do with it!
On Sunday in the video, I explained that I was looking at only 2 currency pairs (one of which was a long on the $/Yen which is up 200 pips this week) and a buy on gold and that has shot up today.
However, I received an email from my broker, Global Prime today about gold that stated:
|Please be advised that XAUUSD has been very illiquid and spreads have been widening to unprecedented levels. We are receiving news from various interbank dealing desks that the volatility and subsequent spread widening are due to a breakdown in Exchange for Physical (EFP) gold. Accordingly, refineries are shutting down and market makers who had short EFP positions are being adversely affected.|
In order to allow continuous market pricing, we will be actively assessing and adjusting our spread filters to be wider in order to allow prices through. Please reassess your XAUUSD positions with considerations towards the current price volatility and trade with caution.
The spread HAD widened considerably and during the session member David from Northern Ireland told us that he was long gold with his forex broker and the trade had been frozen! Forex is NOT the way to buy gold if you intend to hold onto it. Apart from the risk of huge spreads and spikes there is a further problem of the swap interest cost that is deducted on a daily basis on your account.
See here for todays swap prices from Global Prime: https://www.globalprime.com.au/trading/swaps-financing
I was previously an active buyer of gold and used this site to do so. Bullionvault.com
Bullionvault is great in that you can buy any amount from a fraction of an ounce up to and over a tonne!
You don’t have to take physical possession if you prefer you leave it in a secure bonded facility which is audited every day and you can buy and sell whenever you wish.
You can also use it to build a position by buying more as and when you can afford it/price dips.
I would not be tempted to buy the dips in the stock market right now, but gold is the ultimate safe haven and if demand is high and refineries are closing, then I expect it to go on a run and the high from 2011 of just under $2000 could be on the cards in the next few weeks & months. I would obviously hope to catch a pullback/dip, lets hope it gives one!
If you are in the USA, this is another good site: https://goldsilver.com/
It is owned and run by Mike Maloney, who is Robert Kiyosaki’s gold guy. There are also a ton of good videos from Mr Maloney on Youtube on the subject: Mike Maloney Youtube
My reasoning to buy gold?
At the moment the $ is gaining strength, partly because its seen as a safe haven.
However the virus has only just started to escalate there and if Trump does tell folks to go back to work and the situation deteriorates rapidly then gold is and will be the ultimate safe haven.
None of this is financial advice. It is my opinion.
I was a very active buyer of gold from 2005 to around 2014, BUT you need to do your own research and make your own decisions. If you have any questions on the subject please submit a ticket via the helpdesk.
I will explain in more detail in follow up articles later in the week.
One way not to buy gold?
I was talking with a private student today. He had seen the opportunity and had gone to his bank in Canada last week to buy some when it was at @$1450 an ounce and they quoted him $1600+ !!! So DO NOT go down that route.
Also, do not be tempted to buy silver. It is the most rigged market in the world AND you get a lot more for the money but that inturn causes higher storage and transport costs.
Fibonacci. I also spent some time explaining how to use Fibonacci, especially to calculate potential take profit levels.
New members, please note: If I am looking to take a trade long, for example, 1.5000, I place my order 10 pips above & 10 pips below for a short. This is because price often does not quite reach a major line and you need to allow for spreads.
We are NOT a “tipping service” our aim is to teach you how to trade for yourself.
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