Gold just fell below $4,000 today to about $3,876 - buy the dip or wait for lower?
Gold closed today around $3,876 an ounce, down 3.6 percent on the day and down from its record close of $5,318 back on January 29. It broke below $4,000 overnight, October was its second straight monthly fall, and the Fed just held rates at 3.75 to 4.00 percent on October 28. I have been sitting on cash waiting for a pullback, but every dip this year has had another leg down behind it. Is this the dip to buy a small position, or do I wait to see if it tests the low $3,800s first?
2 answers
- Buy a gram, not an ounce
Buy one gram, not one ounce. A gram costs around $128 at current prices, so you get skin in the game and stop watching the ticker like a hawk, but you keep most of your cash dry in case the low $3,800s show up next week. Small positions cure FOMO without turning a dip into a commitment.
- Wait for a close back above $4,034
Wait for a close back above $4,034. That was the breakout level that held since October 28, and today price gave it back on hot growth and inflation data. A single-day 3.6 percent drop after a 27 percent fall from the January record is a falling knife until buyers prove they will defend a level. If it reclaims $4,034, the dip thesis has evidence; until then, cash is a position.