CNBC Mad Money Tuesday July 31st, 2018 5:30pm CST
Jim Cramer talked about Carley Garner and her contrarian opinion on the opportunity, right now, to ride GOLD higher. For a number of reasons.
RealMoney Pro
Gold Could Soon Shine Again
By CARLEY GARNER JUL 25, 2018 4:07 PM EDT
The price of gold has retreated roughly $150 per ounce, or 11%, since peaking in April. The cause seems to be the usual suspects; a higher dollar, a lack of significant inflation, a stable stock market and a growing economy. Investors are busy focusing on the practice of chasing high flying assets higher than putting money to work in "safety" assets such as Treasuries and gold (my reference to gold being a safety asset is a loose one). Still, market sentiment is fickle and there are signs suggesting investors might soon have a change of heart when it comes to precious metals.
Seasonality is positive for gold futures
One of the first resources we consider when looking for trading ideas is MRCI (Moore Research Center, Inc.); here we find helpful seasonal patterns in the commodity markets and even detailed entry and exit dates for futures traders. We would rarely recommend buying or selling futures outright, we prefer to do so with option hedges to mitigate, or limit, risk and provide income. Nevertheless, according to MRCI, going long a December gold futures contract on July 24th and holding through September 6th has produced a profit in 13 of the last 15 years or 87% of the time. The average profit is a whopping $4,029. This is equal to about $40 in price change on a single 100-ounce contract because each dollar move is worth $100 to a futures trader.
