#152. Gold Investment And Tetrahedron Update 3

Learn When To Sell And When To Buy

Howdy! Happy New Year to you all!! I have promised that this blog is not just about unit trust investment when I say ~ Scoop up some valuable tips too on other investments along the way. At this moment, I am so into gold investment and would like to share with you my findings and experience.

In my first article on Gold Investment And Tetrahedron I showed that I took a long (buy) position on gold at RM86.03 per gram from Public Bank Gold Investment Account.

I showed on the second update how the price has gone up.

And now, if you have followed the gold price closely yourself, you will see that the price has rocketed quite well. At this time of writing, the gold price is at USD871.08. I took the chance to short (sell) my investment at Public Bank for the price of RM96.29 per gram. If you are reading this, you might take this as a queue to short your investment too if you have followed my advice in the first article.

Phew! A cool profit of RM10.26 per gram! That's 11.9% profit! Not bad for a short time of investment. This shows that even amidst this economy downturn, if you have the knowledge, you can still turn in a handsome profit.

Why is it time to sell?

We might not know 'when' to sell our investment, but with the demonstration below, I hope you will know 'why' it is time to sell.

You may be interested to know why is it time to sell? Well, there are ups and downs in investment. The market as I always say is cyclical. Sometimes, we must learn to take profit when the reason is right. Now, I may be wrong for selling now. Price may go up further. But at 11.9% profit, I reckon it is a handsome profit. I will wait for the next round when the price is low again. After all, price moves up and down. There will always be a chance to buy again at a low price.

Looking at the gold price chart above, you can notice two straight blue lines forming a 'triangle' and some red arrows markings.

The chart below shows a bigger zoomed in version of that part.


The form the blue straight lines, I connected the two tops of the gold price graph as shown by the two red arrows on the top (pointing downwards). And for the bottom blue straight line, I connected the two bottoms of the gold price graph. Again, those bottom points are marked by the two red arrows at the bottom (pointing upwards).

And inside the ellipse (oval red line) you can see a bigger red arrow. This arrow shows that the gold price graph has dipped below the bottom blue straight line. Following the Elliot Wave theory, the five waves up have already formed. And now will be a time for the graph to move south. Again, I might be wrong in my analysis.

Thus, when the gold price graph breaks through the bottom blue line, I take it as a signal that the price is ready to fall. The price may dipped a little to USD860 region. And would be a good time to buy again then. In the near term (next 6 months), gold price is still bullish as people turn to gold as a safe haven when the US economy is bearish.

Happy buying and selling.