Gold's Selloff Creates Tactical Buying Opportunity, but Garner Remains Bearish

Gold's recent selloff has created a tactical buying opportunity for traders, according to Carley Garner, co-founder of brokerage firm DeCarley Trading. Despite her bearish outlook on gold's longer-term prospects, Garner believes that lower prices and technical support have set the stage for a short-term rebound.

Garner notes that historical seasonal trends favor buying gold around Sept. 29 and holding through Oct. 25, with gains in 12 of the past 15 years. Additionally, December gold futures has held an important daily trendline during its latest sharp selloff.

However, Garner emphasizes that she is looking for a relief rally rather than the start of a renewed long-term uptrend. She recommends traders consider micro gold futures or one-ounce gold futures to limit overall exposure due to the high cost of a standard 100-ounce gold futures contract.