Buy Alert: October 2, 2013

Marcus Haber | October 2, 2013

Buy Alert: October 2, 2013

Trade Details

Buy Barrick Gold (ABX) November $19 Calls for $1.10 or better

Why?

Gold has had a tough year. The precious metal is down 23% so far in 2013. Gold miners have been hit even harder, even the big guys. In fact, ABX – one of the biggest North American gold miners – is down over 47% for the year.

However, I believe gold is due for a bounce. There are too many geopolitical and economic issues looming for gold to disappear as a safe-haven investment. As the price of gold drops, demand is sure to increase.

What’s more, ABX is at a perfect price level for a bounce. It’s sitting right at the 50-day moving average, which has held as support since mid-August. We’re going to buy November ABX calls in anticipation of a move towards the 200-day moving average.