originally published Tuesday, March 10, 2020

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All Traded Options

You might recall that in the PRECIOUS METALS SECTOR update posted on Sunday that we were looking for the Precious Metals sector to get whacked back and it started yesterday with GDX being beaten down 7% - hardly surprising given what happened to the market as a whole – but gold held up, even making new highs in the early trade as we can see on its latest 6-month chart below. However, with sentiment at positive extremes for gold in recent weeks, it now looks set to follow PM stocks down, and it already started down overnight.

Gold is way overbought relative to its 200-day moving average and could take quite a hit from here. It is thought likely that it will drop back either to the black line shown on the chart, or lower to the support level – a move of sufficient magnitude to present us with an opportunity, even taking into account last night’s drop.

One way to exploit this opportunity is by means of Puts in gold proxy SPDR Gold Shares Puts options. As we would expect its chart looks very similar to gold itself, with the differences being that its Accumulation line has been extremely weak in the recent past and it has more a more definite Double Top. If you are interested, I would suggest the March 31st expiring $148’s or $150’s. This provides enough time and although it is considered unlikely that GLD will drop below the black line currently just above $147, an approach to the line would ramp the prices of these options. GLD options are quite liquid with good spreads.

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Table showing the Puts expiring on March 31st…

Table courtesy of

The 3-month chart for GDX shows how PM stocks got whacked back yesterday as expected, suggesting that gold will follow suit.

SPDR Gold Shares website

SPDR Gold Shares, GLD, closed at $157.81 on 9th March 20.

Posted at 6.35 am EDT on 10th March 20.

The above represents the opinion and analysis of Mr Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stockmarket analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.