Gold is surging rapidly! Is the opportunity here?

Have you noticed?$黃金/美元 (XAUUSD.CFD)$ Recently, there have been changes in the market! On November 18th, there was a high opening and an upward trend, breaking the continuous 6-day decline, followed by several days of increase, which also boosted the rise of golden industrial concept to some extent.

Here comes the question: Why was there a decline some time ago? Why is it now rising again?

The previous decline was mainly due to the impact of the U.S. presidential election. Trump taking office at the White House again led to an extreme 'Trump trade': the dollar strengthened, stock market risk appetite increased, and cryptos received a boost.

Moreover, because the market believes that Trump's policies may lead to inflation, which could disrupt the pace of the Fed rate cuts, the yield on U.S. 10-year Treasury notes has also been pushed up. All of these are unfavorable factors for gold.

The current uptrend may be mainly related to the intensification of tensions between Russia and Ukraine. Last weekend, Russia conducted the 'largest-scale' airstrikes on Ukraine in months. Early Tuesday, Ukraine attacked Russia with U.S.-made missiles. The conflict between the two sides may escalate further, increasing market concerns and the demand for hedging in gold.

On the other hand, the U.S. dollar has fallen slightly in the past few days, making the cost of buying gold in dollars lower, which may also be one of the reasons for the recent rise in gold.

In this context, is it worth buying gold now? Let's discuss it from three aspects: long-term trends, technical analysis, and strategies and tools.

Fundamentally: Is gold bullish in the long term?

To understand the long-term trend of gold, one must understand the underlying logic of gold prices.

In short, gold prices are usually inversely related to the USD index, and positively correlated with hedging demand, commodity demand, central bank purchases, and other factors. In addition, inflation and rate cuts can also drive gold prices higher, but there may be contradictions between inflation and rate cuts, as theoretically rising inflation is more likely to lead to rate hikes.

In the short term, there is a possibility of a pullback in gold prices. Factors such as the continued strength of the USD, diminished rate cut expectations (due to downward movement of US bond yields), may suppress the short-term performance of gold.

However, in the medium to long term, there are many factors supporting gold prices.

Although the rise in inflation due to Trump's presidency may lead to future rate hikes, the US is still in a rate-cutting cycle, and the global easing cycle is also deepening (with multiple central banks cutting rates this year, and the European Central Bank also cutting rates in October). Even with expectations of rising inflation, gold, as an inflation hedge tool, may still perform well.

Moreover, the tax reduction policies that Trump may implement will not only impact inflation, but will also increase US government debt and raise the deficit ratio. This could lead to a depreciating USD, an increase in uncertainty (causing an increase in hedging demand), among other factors, bullish for gold performance.

Furthermore, possible tariff policies could increase global economic uncertainty, along with heightened geopolitical uncertainties, potentially drawing market attention to gold due to its safe-haven attributes.

Turning back to the commodity nature of gold, there is a certain level of support and a positive trend on the demand side: central banks in countries like China and other Southeast Asian countries have continuously increased gold reserves in recent years to address global economic risks, and currently this logic has not changed. In addition, the world's largest gold etf - GLD, saw an increase of 19.85 tons in gold holdings in October, indicating a trend of increasing positions. Data also shows that global gold demand in the third quarter increased by 5% year-on-year.

Technical analysis: Is it going up or down in the short term?

Looking at the short term, is it really a reversal or just a feint?

As of November 21st, according to the Fibonacci retracement line on the chart, the point around $2600 on the 61.8% level line has changed from a resistance level to a support level. Between the 61.8% and 80.9% level lines, roughly in the range of $2600-$2700, there may be multiple resistance levels.

Currently, the trend line has broken upwards through the EMA 60, converging towards the EMA 20, standing above the $2650 level. If it can hold steady here, it may form further support. Another resistance level to watch is around $2700, the 80.9% Fibonacci retracement line, if broken through, it may signal a more certain uptrend.

Looking down, there are several support levels, for example: the value of EMA 60, around $2620; the point of the 50% Fibonacci retracement line, approximately $2540. If these support levels are not breached, or if there is a pullback followed by a second rally, that may be a true reversal signal.

It is also possible to simultaneously focus on other technical indicators. For example, keep an eye on whether the MACD will see a golden cross (the DIF line crosses above the DEA line, indicating a potential bullish signal); compared to MACD which focuses more on medium to long-term trends, KDJ and RSI are indicators more oriented towards the short term, they had a golden cross on the 18th, although there are no signs yet, but further attention should be given to whether a death cross (short-term sell signal) will appear.

* This section discusses technical analysis, different indicators or methods may provide different perspectives. Examples are for illustrative purposes only and do not reflect expected results. All investments involve risks and should be determined based on factors such as one's own investment expectations and risk tolerance.

What is the suitable strategy for investing in gold?

Different investment goals require different strategies. Due to the lower convenience and storage costs of physical gold investment, below Bull Sir will briefly introduce relevant strategies using gold ETFs and their options as examples.

1. Directly trade gold-related ETFs

Currently, there is one type that tracks the price of gold (the top 3 in terms of asset size is X). There is also another type that tracks the stock prices of gold mining companies (the top 3 in terms of asset size is X).$SPDR Gold ETF(GLD.US)$ 、  $Gold Trust Ishares(IAU.US)$ 、  $Spdr Gold Minishares Trust(GLDM.US)$ Currently, there is one type that tracks the price of gold (the top 3 in terms of asset size is X). There is also another type that tracks the stock prices of gold mining companies (the top 3 in terms of asset size is X).$VanEck Gold Miners Equity ETF(GDX.US)$ 、  $VanEck Junior Gold Miners ETF(GDXJ.US)$ 、  $Direxion Daily Gold Miners Index Bull 2X Shares(NUGT.US)$ )。

If the goal is to invest in long-term value, choosing a gold ETF that tracks the price of gold would be more suitable, then buy on dips and hold for the long term.

If you want to engage in short-term trading, then both of these ETFs can be considered. In general, the volatility of the gold mine etf is higher than that of the gold etf. Buying low and selling high requires careful attention to the technical indicators. Currently, the position is a bit undecided, you can buy when the uptrend signal strengthens, and sell when the short-term sell signal appears.

2. Trading options for gold etfs

If the goal is to invest in long-term value, you can consider buying long-term call options (LEAPS Call Options) for gold etfs, using the leverage effect of options to capture long-term upside opportunities in gold prices. If you still bullish on gold when LEAPS is close to expiration, you can consider rolling over operations, selling the old options and buying new ones, maintaining long-term tracking of gold etfs, but this also requires additional costs.

LEAPS can also be combined with other options strategies. For example: holding LEAPS is similar to holding the underlying assets, if you want to reduce costs, you can consider selling a Call that is unlikely to reach the exercise conditions, similar to building a Bull Call Spread strategy. If you want to hedge against downside risks, you can consider buying a Put, similar to building a Protective Put strategy.

However, it is worth noting two points:

LEAPS typically have lower liquidity and wider bid-ask spreads. Therefore, when trading, you should pay extra attention to liquidity and whether your bid is favorable (try to avoid using market orders, and instead test different prices for better deals).

Compared to directly trading ETFs, buying ETF LEAPS limits the maximum loss in case of a gold price decline, with higher capital utilization and return rates. However, in certain situations, it may reduce certain profits or increase losses (but within a manageable range).

For short-term trading, the single option strategy has lower costs compared to combination strategies, with a simple logic: go Long Call for a bullish view, Long Put for a bearish view, Short Call if not bullish, and Short Put if not bearish.

For options expiration, you can choose relatively near-term dates (e.g., within 20 days), but avoid very immediate expirations (e.g., expiring tomorrow), leaving some room for control without being too unpredictable. When choosing the strike price, combine support, resistance levels, and various technical indicators for judgment.

The investment logic is actually simple to talk about, but in terms of specific operations, I cannot make decisions for you. Practice is where true knowledge is revealed! Where to find the gold ETF? You can reach it through the following path: Futubull App > Market > ETF > Theme ETF > Gold ETF