The only way I’m playing Gold’s surge (and it’s NOT stockpiling gold bricks!)
Hey folks,
I’ve traded through a lot of headlines, but days like this remind you how fast things can get weird when policy starts messing with price.
Here’s what hit the wire: first it was $20B worth of Argentine currency getting scooped up, then talk of price floors under certain stocks, and now hints they’ll invest directly in more U.S. companies.
“America First” is one thing. But the government steering markets is another. As soon as that chatter spread, you could see the reaction — we sold off around noon and never really looked comfortable after that.
I don’t care what side of the aisle you’re on. My job is to read what it means for trading:
- Price discovery gets cloudy. When buyers or sellers aren’t purely motivated by profits, levels that usually matter can fail or overshoot before reality reasserts itself.
- Volume spikes at odd times. You don’t just get 9:30am jolts — you get midday air pockets when a headline pings across terminals.
- Mean-reversion gets trickier. If someone with deep pockets is nudging price, the “usual bounce” off support can hesitate or vanish.
So what do I do with that?
- Trade smaller. Half-size is fine. I’d rather scale into a confirmed move than guess at the first blip after a policy headline.
- Define the risk first. I like spreads here — verticals or calendars — so I know my worst case the second I click.
- Let the close speak. If a midday headline pushes us around, I want to see where we settle. Reclaims into the last hour carry more weight than the first pop.
- Favor “two-way” ideas. Income trades on stretched names (covered calls, conservative credit spreads) let me get paid while the dust settles.
- Keep the ballast. I still like a modest metals bias on dips. If policy noise turns into real risk, gold tends to catch a bid; if not, tight risk keeps the damage small.
A few quick reads:
- Indexes: Watch yesterday’s close and last week’s highs/lows. If we can’t reclaim and hold those after a headline shove, I stay cautious.
- Single names: Be picky. If a stock only looks good because someone promised a “floor,” that’s not my setup. I want earnings, cash flow, or clear technical strength doing the heavy lifting.
- FX/commodities: Big, sudden flows (like that Argentina buy) can ricochet. Good reason to avoid oversized bets and to let confirmation come to you.
When the ref starts moving the goalposts, I don’t argue — I tighten up, let levels confirm, and use structures that cap risk. There’ll be cleaner pitches once the policy dust clears.
Stay sharp,
— Geof
