Gold may or may not be a currency or hedge against crisis but it has been traded for thousands of years. That being the case, gold can probably be expected to fluctuate in value but it's not going to disappear. At least not in a straight line.
Jeff Kilburg, founder & CEO of KKM Financial, is a gold trader rather than a fundamental purist. For him the underlying demand gives him a trading backstop, but getting ahead of price fluctuations are how he brings home the bacon.
Kilburg says the trader in him thinks gold is on the cusp of a breakout. "I want to see it get back above $1,500, but I think you can layer into gold positions here," says Kilburg in the attached video.
Why wait? Because good commodity traders know to respect the technicals. $1,500 is a level from which gold broke down. Those who bought that level and rode gold to the lows and back the mid-$1,400s are weak holders likely to breath a sigh of relief and bail when they get back to their cost basis. Traders who bought lower will see resistance at $1,500 and take profits. Either way Kilburg says it pays to wait.
"Once we get back to $1,500 everyone's going to come out on Breakout and say 'that was the bottom,'" Kilburg predicts. He may not be going all in for a trade just yet, but the irrepressible CNBC regular isn't afraid to be a little early in declaring victory.
For the record, $1,523 is his breakout level with a target of $1,700 and he sees $1,250 - $1,300 as rock-bottom support. Either way he'll be back on the show to take his lumps or his victory lap as the case may be.
- Investment & Company Information