The gold chart looks precarious. Here's how to profit
Gold is at a technically precarious juncture, and the good news for you is that options market may be mispricing the risk.
TL;DR
- Gold is at a precarious technical juncture, near its 200-day moving average and 50% Fibonacci retracement.
- Momentum and trend indicators are rolling over, suggesting a bearish outlook.
- Macroeconomic factors, including potential inflation and a hawkish Fed, are unfavorable for gold.
- The options market is not pricing in significant uncertainty, despite the critical technical setup.
- A steepening skew in options pricing makes a specific put spread trade attractive, offering a high potential payout.
- The recommended trade is to buy the GLD July 17th 395/370 put spread for $4.10, with a maximum gain of $2090.