Jump to content

Potential 'Long' Gold Trade

Recommended Posts

@Pikto,

It will be worth keeping an eye on Gold and following its price action both closely and carefully. Try and monitor how it behaves on certain news. Try and see if it behaves like you think it will or actually the opposite?

US news both positive and negative is a driver for Gold price action in my experience. Watch the US Dollar along with Gold and what how they both behave. 

Share this post


Link to post

The recent rise in Gold prices has not continued. Now in my experience this could be simply down to short covering activity. This is an assumption by me as I do not know for sure but it would not surprise me. To me the short term trend is down. 

There will be a lot of traders using technical analysis to predict / assume how the price will react. The market knows and understands this. The professional traders know this. The best Commodity Hedge Funds know this and is most likely to be programmed into their trading system. 

As a result I am not expecting Gold to follow the conventional rules that technical traders will be hoping for in terms of Fibonacci retracements, etc. Now I could be wrong so I will use this opportunity to test my assumption by following the price action to see how Gold's price behaves and what happens. 

  • Like 1

Share this post


Link to post

5:00 am - Gold is up over 3 points and 0.25%

5:00 am - Silver is up over 8 points and 0.55%

 

Share this post


Link to post

13 hours later from my above post and...

7:20 pm  Gold is up over 8 points and 0.64%

7:20 pm - Silver is up over 14 points and 0.93%

So any day trade from this morning at 5:00 am and any close from say 5:00 pm so 12 hour hold would have resulted in a profit. 

There could be further votes on Brexit tomorrow and Thursday so Gold and Silver along with Bonds will be very interesting.

In about 40 minutes we shall get the results from the voting today so my eyes will be on Gold and Silver and how they react to the results of the vote. 

Share this post


Link to post

At 5:00 am, Gold is performing a lot stronger than Silver. With the Brexit uncertainty and another vote today on No-Deal Brexit, it is taking the lead and showing Silver the way. 

I think Gold will remain positive while the Brexit uncertainty lingers. The mere fact that it is staying above $1300 is positive. What I find interesting is that an IG Analyst provided its usual if Gold goes above x price then it will be bullish and if it goes below x price then it will be bearish with a chart stuck in there too! Surely that IG Analyst must know about the Brexit votes and how Gold could potentially behave but there was no mention of Brexit in the analysis which really does make me wonder of the worth of providing such analysis?

  • Sad 1

Share this post


Link to post

@Pikto,

With the second day of Brexit related voting in Parliament, Gold, has remained in its bullish tone. 

With a further third day of voting tomorrow I am expecting further uncertainly surrounding Brexit and Gold has a high probability chance of going beyond $1310. 

You asked me on Saturday if Gold would go above $1302. Well Gold's price action has answered your question.

 

  • Like 1

Share this post


Link to post

@TrendFollower

The question now remains how long is it going to hold there.

I've seen many analysys where it's claimed to drop down between 1200 and 1250 lows to then seek another higher hights.

Share this post


Link to post

@Pikto,

It is 5:00 am and it is already down around 6 points. It went up to $1310.60 yesterday and is now trading at $1303.68. It seems the short term trend is manifesting its way downwards.  I do not know how long it is going to hold there. 

I do not know how low Gold will go or how high it will go.

The claims these analysts make are based on historical price behaviour which does not guarantee that Gold will act according to past behaviour going forwards. If it was that easy to predict future price action using technical analysis and past patterns and trends, we would all know when to trade that asset and when to go long and short. We would all be profitable majority of the time. Unfortunately it is not that easy. Gold is not obliged to follow any rules or conform to any technical analysis. That is not to suggest it will not do but I do not know.

One can make assumptions which can then be tested by the price action or one can simply make predictions. There is nothing wrong with that as long as one makes clear that they are assumptions or predictions. 

 

Share this post


Link to post

There will be different ways to play this short trade. One could day trade on the short side or hold until a counter trend back upwards is confirmed. There will be no right or wrong way but there seems to be a lot of selling pressure.

Share this post


Link to post

Gold is trading below its 20 and 50 DMA’s. This presents a potentially bearish scenario. You can only make a decision on the price action in front of you and not what should or could happen. Silver is trading below its 20, 50 and 100 DMA’s. Silver tends to fall harder and quicker than Gold but not always. 

One could look into and consider either a short Silver trade or a short Gold trade with extra leverage. Currently for every one point in Silver you could using leverage trade two points in Gold and get similar if not at times better profit/points ratio. 

The risk is that this could reverse just as quickly should there be any news supporting Gold. The US Dollar will be a key indicator as will economic uncertainty in both the US and U.K. 

One should not look to trade because I have suggested a possible shorting opportunity but should conduct the necesssry research and analysis and then come to an informed trading decision. If this is that my potential short trading idea is wrong then that is fine and then you would not consider going short.

One cannot know for sure how long the bearish stance will remain and how far down it could go. It may reverse and go upwards tomorrow or next week.

Share this post


Link to post

Lots of people are sending me messages asking me how far I think Gold will go down and the answer is that I do not know. I do not even need to know as part of my trading strategy. I do not have a crystal ball and cannot predict the future. My philosophy is the ride the trend until there is a large enough bend which triggers my trailing stop loss.

Share this post


Link to post

With a potential Brexit delay looming and US - China trade announcement not going to be made for another month, uncertainty remains and still exists. It has merely been shifted towards a future time period. 

This means that the short term fundamental drivers and environment for Gold have shifted. This may be part of the reason why Gold is positive this morning around 5:00 a.m. UK time. 

Share this post


Link to post

SIlver is outperforming Gold at the time of writing this post. Even if you doubled the leverage on any Gold trade against any leverage used on Silver then Silver is still outperforming Gold this morning. 

Share this post


Link to post

Your content will need to be approved by a moderator

Guest
You are commenting as a guest. If you have an account, please sign in.
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • IG ISA Season

  • Member Statistics

    • Total Topics
      6,371
    • Total Posts
      28,278
    • Total Members
      37,101
    Newest Member
    lulub2000
    Joined 18/03/19 15:55
  • Our picks

    • Flowless rally - APAC brief 18 Mar
      A flowless rally: It’s being dubbed the “flowless rally”. Equities are ticking higher, but without the fundamental buying-support one might assume. This is especially so when considering the milestone achieved on Wall Street on Friday. Finally, the 2815 resistance level has tumbled, and the bulls have cautiously, quietly rejoiced. There are yellow flags popping up here and there, however, and that is making participants wary. It goes back to this “flowless rally” business: the latest leg of global stocks big recovery isn’t being supported by investor flows. In fact, investor flows look to have diminished somewhat. The reasoning behind this move is somewhat speculative. The impact of share buybacks is one popular argument. Whatever the cause, confidence isn’t accompanying this rally.


      Economic conditions deteriorating: Maybe market participants are still scorned from the market correction in 2018. A bitterness and cynicism stemming from that is understandable. Much of the frustration comes, it would seem, from a widespread recognition that this rally has come in the absence of solid fundamentals. On the contrary, if looking at the macro-outlook, there are more reasons to be bearish than bullish right now. Global growth is (almost) irrefutably slowing, and some of the geopolitical sore-points dictating sentiment, like Brexit and the US-China trade war, are showing little new signs of progress. A major factor keeping this rally alive in riskier assets, perhaps concerningly, is a little case of “fear of missing out”.
      • 0 replies
×