Concerns over the viability of Portugal’s largest banks, Banco Banco Espirito Santo, Popolare and Unicredit have sent market participants once again to the safety of gold. As result gold future hit 3 months highs in today’s session.

Image courtesy Luftbildfotograf: June 19th the daily chart of spot gold began a classic flag pattern with today’s action pushing price above the flag pattern, suggesting the bulls will follow through.

The building crisis in Portugal is just the latest string of crisis in the euro zone that has sent uncertainty rippling through the region and back across the pond in the U.S. The volatility and fear of uncertainty has worked well for the gold (GLD, quote) bugs as money flocks to safety.

Add into the mix Yesterday’s Federal Reserve’s June Meeting Notes release clearing indicating the Fed will be ending central bank’s $15 billion bond buying asset program in October. Will we now see rate hikes and when? The minutes did not relieve when the central bank will begin to hike rates creating more uncertainty.

Bottom Line: We could see gold make a run to the March 17 high of 1392.60 some 54 points from here. Those looking to dip a toe into the gold market can consider looking at the GLD and use one my favorite strategies for entering into a position that began its run with upside still on the horizon.

Look to sell a call at the money 30-40 days out. This does two things for you. If the run stops suddenly you are not in the name yet and get to keep the premium and if the run continues are you are put the shares the premium helps reduce your cost basis.

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