Over 2 years ago when we put together our
Japan report I mentioned to Tres that I preferred to go long Gold, short Yen. At that time his preferred trade was centered around the JGB options market, and to be long the USD short the Yen. Looking back he was right and I was wrong. The USD has indeed performed better, and likely will continue to outperform in 2014. Although up to this point it's been more a factor of a breather in the gold bull market than USD strength.
I'm a gold bull, not a gold bug. I do believe that the long term trend for gold is bullish. This current setup clearly has the potential for some fireworks. Maybe nothing happens (doubtful), but the risk/reward setup is rather favourable from where I sit. Heads I win, tails I win.
Whatever you choose to do with the above information, I encourage readers to never ever confuse "trading for profit" with investing. I'm happy to trade futures contracts, buy gold in the FX spot markets - essentially trade paper in one form or another, but I would NEVER let that obfuscate the fact that I need to hold PHYSICAL GOLD as protection.
Timing a profitable trade is like passing gas, it is largely a matter of knowing when it is inappropriate, and acting accordingly!
Bookmarks