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Gold Prices: This Is Why Billionaire Mark Cuban is Betting on Gold
Mark Cuban Is Buying Options on Gold
Gold prices are rallying and gold bugs are rejoicing as big names start joining hands with them. Businessman and billionaire Mark Cuban is the latest name to get on board with the gold bulls.
Speaking with CNBC, the businessman revealed that he is moving some of his money to gold. According to Cuban, extreme market volatility has left investors confused; nobody can seem to figure out what’s happening.
The Chinese market crash was the first major event that shook the global markets at the beginning of this year. The volatility then spilled over from Asia, to Europe, and then shrouded the U.S. markets.
Following the crash in Asian indices, European indices were the first to enter the bear market. On the side, oil prices continued their slide to hit 12-year lows. Eventually, the U.S. markets gave in to the pressure and fell into correction.
The whole fiasco made market participants run for cover. The next best investment alternative turned out to be gold.
Cuban revealed that he decided to shift to gold after seeing momentum in its trading data. “When traders don’t know what to do, they go where everybody is. And I thought that would be gold,” said Cuban. (Source: “Cuban: ‘Confused’ about markets, betting on gold,” CNBC, February 11, 2016.)
Technicals reveal that traders are indeed starting to pile up in the yellow precious metal. The upsurge seen at the beginning of January has turned into a rally this month. A very obvious uptrend is now in play.
Chart courtesy of www.StockCharts.com
Cuban disclosed that he had bought out-of-the-money call options on gold that are now at-the-money. Cuban said that his trade will make him money even if gold prices go up marginally.
