Managing Editor’s Note: Next Wednesday, July 1, at 8 p.m. ET, our colleague Jeff Brown is putting on an urgent event: The Biotech Moment. He says this event is four years in the making – because that’s how long he’s been waiting for the biotech winter to thaw. Finally, the day has arrived.
On July 23, three powerful market forces are set to converge, triggering what some experts are calling “the golden age of biotech.” Already, small biotech stocks are soaring 25%… 108%… 256%… 453%… and even 850%… in a matter of hours.
But once the convergence hits, Jeff believes we could see the biggest gains yet. To help you capture these gains, he’s created an AI trading system designed to spot these fast-moving stocks – before they soar. He’ll share all the details during his urgent briefing on Wednesday.
Just click here to automatically add your name to the guest list.
Earlier this year, it seemed like everyone wanted to own gold.
Gold finished 2025 with strong momentum, and it went almost parabolic in the new year. By the time it peaked on January 29, just below $5,600, it had gained a massive 29.6% in a month. That speculative bubble fed on itself as speculators piled into gold ETFs, further pumping up demand.
But like other frenzies, it was brutal when the bubble burst.
From that all-time high in late January, gold lost 21% in just three days (high to low). And when the subsequent rebound fizzled out at a lower high around $5,400, gold transitioned into a downtrend.
Now, unlike the start of the year when precious metals seemed like the only game in town, gold barely gets a mention. Folks have shifted their attention back to AI stocks and high-profile IPOs.
But I’ve kept my eye on it. And earlier this week, we closed out a gold trade in One Ticker Trader for a 175% profit. So let’s see how things played out…
On the left-hand side of the SPDR Gold Shares ETF (GLD) chart below, you can see where gold peaked in late January.
After rallying through February, GLD reversed in March and has continued to track lower. That change in trend is shown by the 50-day moving average (MA, green line) rolling over. Check out the chart…
SPDR Gold Shares ETF (GLD)
Source: e-Signal
Notice the action of the Relative Strength Index (RSI), which reflects buying momentum. GLD’s sharp reversal from its January peak coincided with the RSI forming an inverse “V” in overbought territory (upper gray dashed line) and retracing sharply lower.
Then, as that trend turned down, the RSI fell into the lower half of its band (under 50%). That’s a bearish signal. It’s hard for any rebound to take root when buying demand remains weak.
When the RSI faded at a lower high (orange line) and GLD attempted to rally, we seized the opportunity. We were looking to profit from the downtrend resuming.
So we bought a put option on June 15 for $3.15 (or $315 – an option contract is for 100 shares) to capture the anticipated move. A put option typically increases when the value of the underlying shares falls.
And we got our timing just about spot on…
After trying to rally a couple of days later, gold quickly reversed as buying momentum slumped again, pulling our trade into profit.
And with the RSI going into oversold territory, we decided to exit our position on June 24. We didn’t want to risk the RSI rebounding (and driving GLD higher). We sold our put option for $8.68 (or $868 per contract), marking a 175.4% gain in nine days.
Take another look at the chart:
SPDR Gold Shares ETF (GLD)
Source: e-Signal
To be clear, we generated this profit using options. Because options use leverage, they magnify profits and losses. So if your anticipated move doesn’t pan out in your time frame, you run the risk of your option expiring worthless.
However, this trade also demonstrates why options are such a handy tool…
They allow you to gain exposure to a potential move – up or down – using a relatively small amount of capital. What’s more, your risk is capped at the premium you paid.
A $315 bet. Nine days. $868 back. That shows what the right options trade – at the right moment – can do.
Happy Trading,
Larry Benedict
Editor, Trading With Larry Benedict
P.S. If you’d like a chance to get in on our next gold trade, you can learn how to join us here.
Reading Trading With Larry Benedict will allow you to take a look into the mind of one of the market’s greatest traders. You’ll be able to recognize and take advantage of trends in the market in no time.
