Gold future for June dropped 1.9% to close at $661.50, a two months low today.I have a small position of GLD (36 shares) acquired at 67.54 a week ago. It is down (2.87%) till today.
Watched two videos from thestreets.com - the right reason to buy gold and the wrong reasons to buy gold.
The right reason to buy gold should be to hedge the uncertainty (not risk) in market, for example, catastrophic event. It is like buying a life insurance. You do not withdraw it.
The wrong reason to buy gold is to speculate a bullish trend boosted by buying from govenment central banks or weaker dollars.
en, I will think about whether I want a life insurance in the market or whether gold really can provide the life insurance.
Anyway, it still looks like a healthy pull back and I will not be particularly concerned if GLD does not penetrate 200 EMA (about 63.3) and close lower than previous low at 63. Then that will signal a sell signal with about 6% loss.
However, I might get rid of GLD earlier because I think there are better investment opportunities out there. For example, DJI.
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