Monday 5 December 2011

Gold vs Index Basis Widens Up

The chart above should really speak volumes to even the most unobservant investor.
We expect the FTSE-Gold basis (difference) to narrow - i.e. mean reversion. Limited downside, healthy upside, this would be a no brainer if we could trade. Expect real money back on the table by Wednesday.
P.S. Plenty of other reasons to be long Gold (funds opting for physical delivery, exposure to a number of QEs etc), covered over and over again on this blog, make this trade a runner even in the medium term.

***EDIT*** To those that took this trade: congratulations. The basis has closed up nicely.
Posted by at

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)

Legal Disclaimer

Any opinions, news, research, analyses, prices, or other information contained on this website is provided as general market commentary and does not constitute investment advice or recommendation by us and is not intended to be relied upon by users in making (or refraining from making) any investment decisions.

We will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.

Appropriate independent advice should be obtained before making any such decision. Any arrangement made between you and any third party named in the site is at your sole risk and responsibility.