Goldcorp has been an interesting stock to watch throughout the year 2016. In the beginning of the year, and throughout the first half, the stock has soared. However, more recently, Goldcorp has been met with resistance. Now, it looks like we're going to see another volatility filled week, creating opportunities for binary options traders. Today, we'll talk about why we've seen what we've seen from Goldcorp so far this year, why I'm expecting the coming week to bring incredible opportunities for binary options traders, and what traders should be watching out for.
What's Causing The Wild Ride On Goldcorp So Far This Year
Goldcorp, as its name would suggest, is a company that is heavily focused on gold. Ultimately, the company mines and sells the metal. So naturally, the company is dependent on the performance of gold in the market. With that said, the year 2016 has been an interesting one for gold, which ultimately has created the movement we've seen in Goldcorp.
In the beginning of the year, the floor seemed to fall out of the Chinese market. The incredible declines led to global economic concerns and market declines. As a result, safe haven investors looked to gold as a way to keep their money safe. The strong safe haven demand led to 6 months of gains in the commodity, and ultimately in Goldcorp stock as economic pressures out of China, Europe, the UK, Japan, and other regions shook the market.
However, In July, things started to turn around. Economic conditions in the United States, China, and Japan started to stabilize. Soon, the Bank of England unleashed a massive stimulus package, leading to less fear associated with the Brexit. Soon, investors started to expect that the Federal Reserve would increase its interest rate in the month of September in light of the positive news. All of this led to declines in safe haven demand, ultimately causing gold to fall in value. Unfortunately, Goldcorp has followed in the recent downward movement.
Why The Coming Week Is Going To Be An Interesting One
As mentioned above, I believe that the coming week is likely to be an incredibly interesting one for gold, and as a result, Goldcorp. The reason for this is relatively simple. Recently, we've been seeing more and more negative news with regard to the global economy. First and foremost, Chinese inflation is starting to become concerning at best. Also, last week led to a mixed bag of economic data out of the United States, reducing chances of a coming rate hike. These factors mixed with inaction from the ECB leading to further economic concerns in the region and poor news for oil will likely lead to stronger safe haven demand for gold in the week ahead. As a result, we're going to see a battle between the bulls and the bears on Goldcorp as the bulls work to take over yet again.
What Binary Options Traders Should Be Watching Ahead
First and foremost, keep in mind that gold and Goldcorp are very closely related assets. So, a trading opportunity on one becomes a trading opportunity on the other. With that said, in the week ahead, binary options traders should be looking for gains in gold as safe haven demand continues to climb. Keep a close eye on economic and market conditions as recent stories could lead to further concerns, ultimately pushing gold and Goldcorp upward. All in all, there's a lot to be excited about in the week ahead.
What Do You Think?
Where do you think Goldcorp is headed moving forward? Join the discussion in the comments below!
[Image Courtesy of Wikipedia]