Hmmm… physically I might have a fainting heart but mentally I might not :). Investing in gold is not for the fainting hearted . The last 5 years I have seen gold up $20 up a day and gold down $20 dollar down a day. Am I affected ? Not really. I don’t play contra or margin, I only buy with money I can afford to lose . It is a misconception to many people that when you invest, you are looking at return. But not for me. After the 1997’s Asia financial crisis, I learned that if you want to invest, the 1st strategy is prepare to lose, likewise any kind of investment be it brick/mortal or online.

I thought for those who are starting to get their hands wet on investing on gold and silver stock. You need to read this : Dumb Money Dumps Gold.

Are we having fun yet? The precious metals markets went a little nuts last week, didn’t they? Down, up, down. Make up your mind already.

Alas, the latest Commitments of Traders report issued Nov. 16 was its usual stoic self amid the insanity. This is the data issued free each week by the U.S. Commodity Futures Trading Commission. It tells us what the major players are up to in the futures and options markets.

Turns out the “dumb money” small traders in gold derivatives have thrown in the towel. The latest data shows their net long position falling to a bearish extreme as a percentage of the total open interest in gold futures and options.

What does that mean in layperson’s terms? The folks who tend to be positioned the wrong way in the markets believe gold has topped, and they’re selling it. That means my system based on trading opposite to the small traders in gold has just flashed a renewed bullish signal for Canadian Gold iUnits (symbol XGD). (See the table below for more details.) Personal disclosure: I’ve been long XGD since this setup flipped to bullish back in May. I found in my research on the past COTs data that the best way to trade XGD was to fade the gold small traders.

In fact, investing in gold 5 years ago was no brainer investment, there were less than 10 producing gold and silver companies, if you bought $1 worth of every of those stocks, you could easily made more than 1000% return. It was not a rocket science, that’s the reason dummy like me can claim to make plenty of money on my gold and silver investment. But now it is not so, there are a bit more gold and silver stocks to pick from. How you gonna profit from this unprecedentedly gold and silver bull ? Turned on to Seaykopitiam dot com . Cheers !

If you like to read the rest of the above article, it is here.

This entry was posted on Tuesday, November 20th, 2007 at 6:48 pm and is filed under ZMisc. You can follow any responses to this entry through the RSS 2.0 feed.