If you use the June low as the new floor, then you can start to establish new positions on any backfill in the price action. That low can also be used as a stop-loss point for those who have put money to work in GLD. A risk management approach should be a key component of any trading strategy, but especially one in this erratic environment.
While gold miners may ultimately represent the biggest upside potential in this sector, I am still avoiding them based on their inherent volatility. I think that accessing the price of gold bullion through GLD represents the easiest method of participation for the average investor.
The benefit of this ETF is that it is large, liquid, and easy to understand. In addition, when you use GLD you don't have to worry about purchasing, storing and protecting physical gold, which can be a challenge.
At the time of publication the author had no position in any of the stocks mentioned.Follow @fabiancapital This article was written by an independent contributor, separate from TheStreet's regular news coverage.
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