Friday morning's weak jobs number jump-started a surge in gold, and one trader thinks that the precious metal is set to push even higher.
151,000 jobs were created in August according to the Bureau of Labor Statistics' nonfarm payrolls metric, missing the 180,000 expectation, which leads Todd Gordon of TradingAnalysis.com to conclude that the Fed isn't raising rates anytime soon. This, in turn, bodes well for gold, which jumped after the miss.
"I believe the Fed's mission is to keep volatility as low as possible heading into that November election," Gordon said Friday on CNBC'S "Trading Nation." "I think it spells flat interest rates, a lower dollar and a higher gold market."
Looking at a chart of the GLD, the ETF that tracks gold futures, Gordon gives the technical case for why the yellow metal is headed up. From March to June of this year, GLD hit resistance at $124 and $125. But GLD broke through that level, which then became the floor for GLD during the summer.
This leads Gordon to believe that GLD can retest its July highs of around $130.
For his trade, Gordon wants to buy the October 125-strike calls and sell the October 130-strike calls for $1.90 per share, or $190 per options contract. He would be risking that much to potentially make a profit of $310 should GLD close at or above $130 on October expiration.
"If GLD were to simply break below this low, about $124.50, we're going to get out of the trade and protect premium that we've outlaid," said Gordon.
GLD is up about 16 percent year to date, surging as gold has rallied this year.