Gold - AU 10/29/11

Gold - A precious yellow metallic element. Atomic number 79. Specific gravity 19.3 at 20 degrees C.

Friday I got a buy signal on GLD. Usually I like to see a pullback before I get in but the better method might be to get in partially and then add to my position when there is a pullback.

The simplest way to own gold is to buy into the Exchange Traded Fund GLD. It is not as nice as actually having gold certainly, but it is more efficient to buy and sell it just like a stock. I love the look of gold; whether it is the 22 Kt jewelry that my wife owns (and is safely in the bank vault) or the gold 1 oz coin that she has in a necklace (that is also in the bank vault). We don’t own that much of gold, but the investing public certainly is trading GLD in larger and larger numbers. I was not surprised to find that the volume of the stock Coca cola (KO) traded every day is around 12,500,000 and is half that of the volume traded in GLD, which is at 23,500,000.

My current chart on GLD is attached below. No guarantees that this will be a winning trade. But as part of my alternate investment portion of my portfolio, I have decided to keep gold as a certain percentage of it but using tactical asset management (timing systems). That means when I get long signals, I will buy gold and sell it when I get a sell signal. In the long haul, I will make a decent return on GLD but I have to keep in mind that any one signal can turn out to be a loss.