Eagle Eye Opener: Gold Bulls Urged to be Wary; Option Traders Confident in Financials; Inflation Rises in Brazil

Gold Bulls Urged to Be Vigilant (YahooFinance)

After a 12-year run, even gold perma-bull Jim Rogers is preaching caution to gold investors who’ll listen: “Gold is having a correction… and it’s possible that correction is going to continue for a while longer.” With the lone exception of the 2008 global financial crisis — when bullion slid 32% — the traditional safe-haven investment has performed like a proverbial champ. According to Rogers, “Most things correct 30% every year or two“ but gold only has experienced a big reversal once in the last dozen years. So, gold investors, be vigilant and brace for a possible bumpy ride during the next few months.

Option Traders Confident in Financials… for Now (CNBC)

Investors in financials led yesterday’s broad U.S. market rally, with Bank of America (BAC) experiencing heavy call option trading, according to OptionMonster. With most of the option contracts expiring in December and January, traders are betting the rally continues for the short-term at least. Morgan Stanley (MS) also saw heavier than normal volume, with traders looking for it to experience a rally as well. Whether volume rose on the expectation of a fiscal cliff agreement, or traders trying are to lock in profits before the year’s end is anyone’s guess. But for now, BofA and Morgan appear stronger…

Brazil’s Getting Worse… (Bloomberg)

Inflation in Brazil accelerated more than analysts and investors expected in the second half of November, with the country’s price index up .69% — the fastest pace in 19 months. This jump has boosted the BRIC-nation’s annual inflation rate to 5.78%, much higher than the Brazilian central bank’s target of 4.5%. Since August of 2011, policy makers have slashed lending rates 525 points to combat the price rise. President Dilma Rousseff’s government also has lowered sales taxes, stopped payroll taxes and reduced the bank’s reserve requirements to stimulate growth beyond the expected 3.4% in 2013.