12 April 2010 - 8:51Trading advice 4/11/10

For those who know me, I have been recommending buying gold XAU/USD or GC after it cracked $1,000 and dropped back to $800. I still think it’s going to be the biggest bull market in history going forward, especially as bankrupt countries like the U.S. spend more money they don’t have through the Federal Reserve who enables them and Wall Street to “get drunk” as “W” put it. While it’s highly likely that the Fed’s will move to outlaw owning physical gold like Roosevelt did in the 30’s, we can still fight inflation by “owning” gold indirectly in the market. It only makes sense that as the economic situation worsens that more people will stockpile physical gold driving up demand and as a consequence the price per ounce will rise even further.

Until the day comes when the dollar is fixed to gold at some astronomical level in the future, it’s a great way to protect yourself and make many times more money than you could by buying the physical metal at no leverage. The trick is not taking a position you can’t afford to hold long term in your trading account to handle the high volatility. Of course I am not against buying the dips in this market either and dumping it intraday if that’s your style but Ideally you should also have a position you are sitting on for long term growth and to guard against inflation. We can’t be naive enough to trust government inflation numbers whose calculation has continually changed to make for more politically acceptable levels. If you buy XAU/USD that is gold on the spot there is no expiration or delivery date so you can literally hold the trade for years if you wish.

If you are currently working with a broker which does not offer this, please contact me so I can set you up with a broker who will offer it for you and also give you very high leverage so that it takes minimal margin to hold the position. This way you can continue running your currency trading system will minimal effect on your available margin.