For months now, people are talking about QE2 and the devaluation of the dollar. I was at a point,where i started to think about being 5% in Gold,because i believed what they said and thought it would be a good idea.
But then i luckily got to my senses again and started to look at the numbers. I realized, that even the biggest gold bug out there has a target for gold around 5000 $. I am not saying that i am not seeing that as a possibility,but the first thing i have to see is price evidence.
Gold is near all time highs now, and there might be some great trading opportunities coming. But it is not worth for a day trader to focus on gold or silver too much, because there are always strong and weak sectors in the market,and as a day trader you shouldn’t think like a long-term investor. If the metals sector is strong, trade it , if it is not doing anything, focus on sectors that are strong.
Long term trends are a good thing, as long as you know how and when to trade them. In gold that means that most of the time i don’t trade it as a day trader,because there are better setups out there.