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« GOLD CORP: The Glamis takeover, don’t bank on it. | Main | GOLD: A tidal wave of Media Coverage »
Tuesday
Sep052006

SPREAD BETTING: A gamble on Gold

Our research into gold, gold price movements, gold charts, and gold fundamentals sometimes uncovers an opportunity for a small bet on gold. Yesterday produced one such opportunity to gamble on gold.

You must bear in mind that this is not an investment, it is straight out gambling, and you should treat it as you would a racehorse. Anything can happen to prevent your golden horse from winning.

As it was Labour Day and everyone was asleep we decided to place the following bet:

Using IG Index in the UK we placed our money through a ‘Controlled Risk Bet’ i.e. a bet of the futures market but limiting our loses should things go wrong.

We placed £10 per point on December gold with a 50-point limit. The maximum that we can lose is £10.0 x 50 = £500. So, the downside is that we could lose the lot if gold doesn’t perform.

The spot price of gold yesterday was $626 and the December price was $636, so we need to be above $636 by the last trading day, which is the Friday of the 3rd week in November 2006. Don’t think that a bet on December gold means expiry in December it doesn’t. Our 50-point limit means that if gold falls to $586 then we will be stopped out.

Our strategy is close the bet when gold gains $50 to reach $686. Yes, of course we believe that is achievable.

Our strategy is to try and double our stake on this one.

As usual don’t go too mad on it, as we are predicting a volatile period between now and January 2007 for gold.

05 September 2006

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