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1 - I'd love to buy some more at the price I originally bought at.
2 - If I had bought more I'd be selling some - but not all.
- you can't always sell at a profit so do so when you can.
 

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The best way to play it is to sell. In 2011, gold was the thing to own. And silver outperformed as momentum took off. Look how that ended - almost 10 years of no returns. In 2011, the US was on the verge of default and the world economies were in danger of crashing for the 2nd time in 3 years. It could hardly have been worse. Once things are so bad that they can't get any worse, then they can only go up, even if it is still bad.

Idon't see why I would touch gold. Miners are recording huge profits and dividend increases. Every expert in the space who has lived through past crashes will be selling to the public. And then starting new companies and IPOing the whatever garbage mine prospect has been sitting in backwoods Ontario for the last decade untouchable at $1200, but maybe profitable at $2000. The time to sell gold and gold companies is when the miners are actually making a profit. You buy them when they are losing money, not making it.

Therefore, run! This rally has been building and smart money has had plenty of time to accumulate assets which will now be offloaded to the uninitiated.
 

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I'll tell you the best way to play the gold rally: decide on what % gold you want in your portfolio, make a commitment to it, and stick with that over the long term.

It should not be a short term decision. Not something you do for a few months and then give up on. How much gold will you permanently carry in your portfolio?

I once had 25% gold, but decided that was too much and brought that down to 20% gold. Argonaut also has 20% gold. Others recommend 10% gold. Something in that ballpark seems like a good weight to always carry.

Good vehicles for this are MNT and CGL.C, or if you're trading US dollars, then IAU.

Don't buy mining stocks. If you're going to invest in gold, hold a bullion ETF such as the above. I hold all of those.
 

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The previous rally started around 2007 and ended early 2012, so it took about 4 or 5 year, before it dropped, potentially related to talks of ending QE and increasing rates toward normal. I would not be surprised if gold goes up even further. It has broken above its previous high, which is technically bullish. Personally, I am bullish in the short term, but bearish in the long term.

As a trade, I would not be inclined to go long here without some sort of option protection (long calls or married puts). Iron condors, short call or long put calendars and bullish/bearish spreads could be good choices here.
 

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The previous rally started around 2007 and ended early 2012, so it took about 4 or 5 year
The last gold rally started much earlier. Gold had a very healthy uptrend from 2001-2012, so the rally lasted for 11 years. It was a powerful bull. The breather was brief, only about 2 years. But the new rally / bull market appears to have started in 2015.

Overall I think we've had a gold bull market for the last 19 years. A little break in there, yes, but it's quite a strong bull market.

To show how strong that bull market has been, I'm first going to show the 19 year chart of gold, followed by TSX (using XIU so that we get total return). Both are clearly trending upward, but I think you would agree that gold appears to be a more consistent and steady bull trend.

I'm really not sure how people talk themselves out of participating in the 19 year gold bull market. Generally one tries to identify a bull market and then participate.

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The last gold rally started much earlier. Gold had a very healthy uptrend from 2001-2012, so the rally lasted for 11 years. It was a powerful bull. The breather was brief, only about 2 years. But the new rally / bull market appears to have started in 2015.

Overall I think we've had a gold bull market for the last 19 years. A little break in there, yes, but it's quite a strong bull market.

To show how strong that bull market has been, I'm first going to show the 19 year chart of gold, followed by TSX (using XIU so that we get total return). Both are clearly trending upward, but I think you would agree that gold appears to be a more consistent and steady bull trend.

I'm really not sure how people talk themselves out of participating in the 19 year gold bull market. Generally one tries to identify a bull market and then participate.

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Technically you are correct about the duration of the bull market. I was more emphasizing the times it went near-vertical, as is happening now.

Also I was looking at the price of gold in USD which shows a hiatus between 2013 and 2018:

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I am keeping my physical gold til I die. (I only got 13 oz.)
I want to be able to sleep at night.
I have no confidence that America will survive this pandemic and remain intact.
I am anxiously awaiting China-Russia to introduce a gold-backed currency.
 

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Technically you are correct about the duration of the bull market. I was more emphasizing the times it went near-vertical, as is happening now.
Ah good point.

I still stick with my original advice: if one thinks gold has a reasonably good chance of forward performance, then I would commit some % of your portfolio to it. Most people will do better with this than trying to trade gold.

I have no idea how I would trade gold in the short term.

Also I was looking at the price of gold in USD which shows a hiatus between 2013 and 2018:
Fair enough. It's interesting how much the picture changes if you chart gold in, say, EUR, GBP, or CAD.

Let's not forget that gold continues to be an excellent diversifier for portfolio construction. Even if you don't buy the story of gold as a store of wealth, perhaps you can buy the story that some weight in gold smooths a portfolio and increases the Sharpe and Sortino ratios. And that has worked since 1973, whether or not gold was rising or falling.
 

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Ah good point.

I still stick with my original advice: if one thinks gold has a reasonably good chance of forward performance, then I would commit some % of your portfolio to it. Most people will do better with this than trying to trade gold.

I have no idea how I would trade gold in the short term.



Fair enough. It's interesting how much the picture changes if you chart gold in, say, EUR, GBP, or CAD.

Let's not forget that gold continues to be an excellent diversifier for portfolio construction. Even if you don't buy the story of gold as a store of wealth, perhaps you can buy the story that some weight in gold smooths a portfolio and increases the Sharpe and Sortino ratios. And that has worked since 1973, whether or not gold was rising or falling.
I totally agree. Looking at it in terms of investing (as you do) is a very good approach. I was more thinking of trading, because OP asked for the "best way to play this rally."

Of course the correct answer is always: "invest" and "don't play"!
 

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I think that buying actual physical gold is like buying a really good mattress.
I sleep well.
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I got to ask ...... how is it possible for the markets to sell all the Paper Gold? How are any gold dealers able to promise you that they can provide the physical gold on demand?
I think that there is more paper gold being sold than what is being produced or mined.
If the markets collapse because America loses the world reserve currency, just how long do you think you might need to stand in line at the mint to redeem your paper gold?
 

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Don't buy mining stocks. If you're going to invest in gold, hold a bullion ETF such as the above. I hold all of those.
Why not? Investing in gold and investing in gold producers are two different things, which are not mutually exclusive.

One could buy gold and gold producers, since they are two totally different kinds of investments. Physical gold is viewed as some hedge-investment, while gold miners is an industry-specific investment. It's like buying crude oil vs oil producers, rice vs rice producers, orange juice vs orange juice producers, or any other commodity. One depends on the demand of a commodity, the other depends on the profitability of the company producing that commodity. Apples and oranges, not necessarily correlated.

(Gold) XGD and MNT are correlated at 0.75. It was a better choice to hold the commodity. The demand for the commodity did better than their producer's profitability.
(Oil) IMO and HUC are correlated at 0.35. It was a better choice to hold the producer. The producer hedged the commodity's fluctuations.
Commodities and producers are definitely not the same kind of investment. Though a well-managed company could offer returns correlated with the commodity.

I agree that if one wanted to choose between XGD or MNT, I'd say to go for MNT. That's because how physical gold has been viewed through history, it's a currency basis.

But when I looked at XGD holdings, I liked KL's financials. It seemed like the only gold producer with amazing stats. (FNV is also worth mentioning for its price growth)

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Why not? Investing in gold and investing in gold producers are two different things, which are not mutually exclusive.
I just think that the miners have been very disappointing companies over the years.

My other problem with them is the volatility. Gold itself is already volatile. With the miners, you leverage that up even further and it results in some really crazy volatility.

During the pause in the gold bull (2012-2015), XGD fell more than 70% which is extremely challenging for any investor. In the same period, gold bullion only fell 30%

So you take a pretty normal 30% correction in the precious metal and it turn it into a 70% roller coaster drop!
 

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I decided long ago, when creating my portfolio, that I wanted 7.5% in gold, and I'd let myself go down to 5% or up to 10% before rebalancing. So if I hit 10%, I sell a little. If I go below 5%, I buy a little. And I try to hover around 7.5% ideally. I do this regardless of the price, but it usually means I sell high, buy low.
 

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A gold mine is a hole in the ground with a liar at the bottom. The longer gold stays high, the more holes in the ground that unsuspecting shareholder money will be dumped.
 

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A gold mine is a hole in the ground with a liar at the bottom. The longer gold stays high, the more holes in the ground that unsuspecting shareholder money will be dumped.
I have my complaints about mining companies too. I posted a bit of a rant in this other post.

Generally, I don't trust public mining companies and I don't trust their executives. I also don't trust Eric Sprott, who has invested heavily in various miners and served on some of their boards. This is not a statement on Mr. Sprott's credentials and lengthy work history. He has an impressive career and is generally well respected. Personally -- just ME -- I don't trust him or his firm.
 

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I decided long ago, when creating my portfolio, that I wanted 7.5% in gold, and I'd let myself go down to 5% or up to 10% before rebalancing. So if I hit 10%, I sell a little. If I go below 5%, I buy a little. And I try to hover around 7.5% ideally. I do this regardless of the price, but it usually means I sell high, buy low.
Rebalancing can bankrupt you. If something goes to zero taking money from one asset to put into another asset to hold a certain percentage in each asset will cause both assets to be wiped out.
 

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One way to play the metals is with seasonal steel from mid Oct to end of Dec, triple leveraged silver etf mid Dec till Feb 21 & gold stocks in the summer during seasonal strength
 
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