Friday, October 11, 2013

Gold hammered??

The reports from the Chicago Mercantile Exchange (CME) this morning of are one large sell order that caused a large drop in gold price such that the electronic trading was halted for several seconds.

Some of the gold bugs have been alleging manipulation of the gold price for some time and I take those accusations with a grain of salt. However, from a trading perspective it is suspicious that anyone, particularly a large concern with a large amount of gold to sell would just place an order so large that it moved the price $25. It makes no sense. A large holder expects to unwind a long position of weeks or months. And an order so large as to move the market is counterproductive to an orderly unwind.

This happens at a time when the US Dollar is WEAK. And by weak I mean nearing  lows. This should be a cause for gold to rise in price.

Is the price of gold being manipulated to mask the decline in the dollar? That is the question I ask myself this morning.

The article is here:

After I posted this above I got to thinking. Not something that I do often enough it seems.

I found a chart of long term US Dollar index. It looks significantly different from the charts that I usually use of UUP, the dollar bull ETF.
On the actual DXY chart the USD is in the middle of a historical range and can go either way from here. Although it looks set to go down to me.
But not the calamity I had been expecting.

This event, my lack of accurate information, speaks volumes to the importance of money management. Money management is the key to making money in the markets.

Meaning: Add to your winners. Cut your losers. Never average down.
That way even an idiot like me can make money.


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