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Potential 'Long' Gold Trade

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4 hours ago, TrendFollower said:

@Mercury,

I was reading your latest post on your thread and I agree with your view that Gold will need a catalyst and that catalyst will most likely result in stocks declining. That catalyst will most likely be some form of negative news in relation to economics, business confidence, political risks, etc. 

Im sure sunday night it will open lower than the 1590 it closed at fri nite and most people will  buy so there be a big boom till 12. Then asian markeft opens pwople taking there gains at 1600/10

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@dmedin,

You could be right, I simply don't know. I don't have a very strong bullish feeling about Gold though I accept it could storm upwards should the right conditions prevail. 

For Gold to drive upwards and trend strongly on the upside from here it needs risk, uncertainty and panic in the markets. It needs Bonds to continue moving upwards and stocks to continue declining. It needs economic, political and business risk to increase significantly. If that happens then I would be extremely bullish about Gold but if it does not then not. 

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@Chazza69,

Let us see. I think the Corona Virus will certainly help the Gold price. If things get worse and it starts spreading significantly around the world then this could cause fear and panic in the markets which could result in the Gold price increasing.

That narrative/backdrop could be the catalyst for Gold. 

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12 hours ago, TrendFollower said:

@Chazza69,

Let us see. I think the Corona Virus will certainly help the Gold price. If things get worse and it starts spreading significantly around the world then this could cause fear and panic in the markets which could result in the Gold price increasing.

That narrative/backdrop could be the catalyst for Gold. 

Whats your thoughts on oil i dont see why it wont drop mid 40s for the amount of bpd being over produced and china not taking 250.000 a day. My short is at 5107.  I currently have a short on gold at 1585.36  which shows minus £54  im going to wait for market to open hopefully lower and switch sell to buy and look for 1600/10 then take what do u think ?  Cheers mate jeff c

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On ‎09‎/‎01‎/‎2020 at 06:35, elle said:

gap has just been closed

I posted this earlier in another gold stream

Capture gold.PNG

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@Chazza69,

I do not see a valid reason to short Gold right now at this juncture from a trend following perspective. You may be right to short Gold only time and price action will confirm that but right now Gold is just as likely to go up as it is to go down. 

All it will take is further bad news and an increase to political risk and economic risk for Gold to move further upwards.

From a trend following perspective Gold on the 'daily' is currently trading above its 20, 50, 100 and 200 DMA's so I am not sure I would want to short an asset which is trending upwards clearly with potential to continue trending upwards should their be further world shocks. 

1015739507_SpotGold_20200203_07_17.thumb.png.33808935ffd56ca2011a8af3d46c4ccc.png

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Am buy at 1578 gold and 5148 madea a fewxquig surfing the mardtķŕt. I ive onky 1500 spare just now spare what elae would you consider purcasing ads fetting sick of the pairs needing thousands to trade

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@Chazza69,

Gold is now trading below its 20 DMA so now you may want to consider and I state consider shorting Gold. If it starts moving towards its 50 DMA then you may want to short as early as possible or you may wish to wait until it crosses its 50 DMA. 

I really cannot see Gold going below $1450 in the current political and economic climate so the maximum move downwards here is around 1000 points but I cannot see this playing out. The 200 DMA is just below $1500 on the daily so even if it went towards this we are looking at around 500 points from here. 

The maximum I see Gold going down it between the 50 DMA and 100 DMA as remember as days go past the moving averages move too! Traders often forget to factor this in. 

The question you need to ask is whether there are any better trades out there for you right now? Based on price action and using trend following principles there is no reason to go long right now on Gold but there is a reason to go short. I am not suggesting shorting Gold is necessarily the best trade out there and any significant news could reverse Gold's price action pretty quickly but right now shorting Gold looks more favourable than going long Gold. 

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Gold's price action has just given us a reason to initiate a 'long' trade.

It is now trading above its 20, 50, 100 and 200 DMA's on the 'daily'. This is a bullish signal/indicator. 

1493352537_SpotGold_20200218_17_32.thumb.png.d3919d7d65c667764ddae6c4c2e56ed2.png

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Hey buddy thanks for getting back to me im looking for some big advice i currrently have 2sells open 1 in oil at 5130 and gold at 1566 im only £2250 in account but its all on both trades at this time 1845 gmt im -480£ on the oil and -£380 on the gold im not to worried about the gld coming back down its the oil price thats the worry. Ive been reading alot on the oil and expected it to go to 48 maybe but as im sure your aware the tripoli carry on not sure if it was a rocket but they evacuated that area and the virus they think might have peaked. Its trump now tgats the problem with the sanctions on tanza and russia over crude now pushing prices up. As we know usa is now stockpiled with oil and pumping more oil than fcast so hes did this to push prices up on the oil. My main worry is can this realistically come back down to 51 a barrel or is it onwards and upwards now for what he has done. Theres a meeting in march ive heard could they bring the oil price down there. Im worried that i could just let this run and it will top atleast full investment on oil should i cut losses on the oil my friend. Nothing ever works for me anytime something happens bad with gold or oil im always on the wrong side from last year aboit september. Not once have i been lucky when ive expected the price to go in my favour something happens. What would you do. I could put another 1000 in but oil could go and burn that. But im hopefull with the reading in the amount of over production it must come back down surely. I appreciate you help and advice thanks jeff c

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@Chazza69,

I cannot predict the future with any accuracy and nor do I have a crystal ball. It is unclear what your trading strategy is and whether you have an actual trading plan. 

My advice to you would be to read two of my threads. One of the is called Trading Plan by Trendfollower and the other is called Trend Following by Trendfollower. Once you go through the posts in both of these threads I think you will pick up some really valuable information and acquire some knowledge thus increasing potentially your trading skills. I would really urge you to read the posts in both of these threads and it may help you and show you a path in relation to trading. 

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On ‎02‎/‎02‎/‎2020 at 19:27, elle said:

I posted this earlier in another gold stream

Capture gold.PNG

Getting interesting

Capture gold x.PNG

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When you look at Gold on the 'Monthly' and 'Weekly' then it seems like it is well on the way into a longer term bull run after a healthy consolidation. 

Gold's move will be a lot slower than other more racy Commodities so patience will be required but we are witnessing a move potentially towards $1700. This has to be the price target which Gold must hit at some point in the coming weeks and months. 

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So as you can see from my post above that I was anticipating a move towards $1700 and Gold is very close and touching distance to this psychologically important price point. 

If the Coronavirus frenzy and panic continues then I am anticipating Gold to move into the 'blue rectangle' price zone and try for $1780 - $1790 price area where it is going to find some strong resistance. 

901959877_SpotGold_20200306_12_15.thumb.png.3e417147fb0d71c82d6f88e5f3ea95e9.png

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I can see Gold this week moving into the $1700 price zone. I think Gold will be choppy and there will be more volatility than usual but Gold should go above $1700.

Bond yields are falling so the background narrative is supporting Gold prices right now. I do not know whether Gold will hit $1800 but if it were then I think a new all time high would be the price target and $2000 would be on the cards. However at the moment whilst the Coronavirus situation is not contained and the risks severely reduced then I can see Gold trading between $1700 - $1800 for sure.

If the Coronavirus risks significantly reduce then Gold could move back down towards $1600 price zone. I do not see significant downside in Gold for the next quarter at least. Yes there will be drops and corrections and it will be more volatile than normal but I do not see a sharp price drop like we have seen in equities for the next few months. 

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So Gold hit $1700 price zone.

It is now back in the $1600 price zone. It could easily go into the $1800 price zone should things get worse or remain in the $1600 area and decline slowly. The reason why I suggest this potential scenario is because Silver is looking rather bearish right now and in my experience in a bull market Gold will lead Silver but when the decline begins then Silver often (not always) leads Gold. 

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Posted (edited)

What is rather concerning for me on Gold is that with such a strong narrative in the background, Gold, and such a large drop in equities is not being match by Gold's price behaviour at this moment in time. Bonds are behaving like I would expect them to and based on economic theory makes sense. Gold, I am not too sure about right now. I have never hid the fact that I am not a long term fan of Gold as I think there are other assets which over a longer term period that outperform Gold. However with the Coronavirus situation (especially in Italy) I expected Gold to be higher. In fact a lot higher.

So the question for me is whether Gold is losing its 'shine' and its safe haven status is slightly declining from historical levels? Now just as I state this Gold will go on and make new highs!!!

Edited by TrendFollower

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I tend to use the 'Daily' but when you look at Gold on the 'Monthly' and 'Weekly' then the bull run seems to be still on.

I accept on the 'Daily' Gold does not look like it is behaving like a safe haven. The reason being is that you need hard cash to invest in Gold or trade Gold and I think we may see some hoarding of cash at the moment until the market settles which could be weeks/months away. Cash may stay on the sidelines for a while yet as too much volatility and uncertainty.

Silver is performing even worse and Platinum and Palladium are making precious metals look like high risk investments! This is where precious metals go up in anticipation of the bad news and when the bad news comes, redemptions and selling occurs as the mighty take their profits and run. 

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If Gold is going to follow Silver then Gold may have more downside left. Remember Gold would need to consolidate before any next leg upwards and we want to see a strong confirmation of a potential bottom which we have not seen yet. 

I think traders need to be careful. Patience and discipline is required. I do think Gold will at some point continue it's longer term upward trend but for not it is going to be a bit scatty and unpredictable. 

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Gold is only worth what someone is willing to pay for it. It cannot be used to buy a cup of coffee or a loaf of bread. It is heavy and expensive to stop. Its shipping costs if you want to move it to another country including insurance are expensive. It has a reputation for a safe haven which gives Gold its real value.

However, Gold is suppose to shine and go up in value during such times and it is not. It went up prior to the Coronavirus but after bad news was released it has not really accelerated in price like many expected. This is because Gold too like other commodities has a large element of speculative trading associated to it. 

One must also put things into perspective. I am not a long term fan of Gold as I think there are many other assets which will beats its performance over the next 10, 20 or 50 years. However, if you look at its 'Monthly' chart below then you will see its longer term trend is still in tact. 

1469299062_SpotGold_20200316_19_53.thumb.png.4313a0921062f962b8dfeba029e3417b.png

Now if you look at its 'Weekly' chart then you will see that the current drop is merely a sharp correction in what looks like an upward move in Gold. 

1591257446_SpotGold_20200316_19_54.thumb.png.ea6395060431fc80680d99aa63793328.png

It is when you get to the 'Daily' which of course is a shorter timeframe than above but still longer than the shorter timeframes that you see the sharpness in the drop. 

1436239736_SpotGold_20200316_20_00.thumb.png.d846103efdbaa93c68cea1be66585739.png

Gold has done well to hold around the $1500 level. If more bad news comes in and interventions by world governments do not work or are not seen as being effective then that is when I think Gold could try a move towards $1800 area again. 

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If ever there was a time for Gold to shine, now would be it!

If current market conditions and economic uncertainty cannot raise Gold to new highs in 2020 then it is going to convince me even more that Gold's future is anything but bright. 

Gold's $1.9k historical all time high has not been hit since it was last touched so I am intrigued to see what price levels Gold reaches. 

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Does this look like the chart of a 'safe haven' asset during this Coronavirus crisis? 

1298026588_SpotGold_20200318_12_09.thumb.png.4cd2891e62cb5cb8cea12cb314781aae.png

The Gold price is not going up significantly which is telling me that not enough people are buying Gold and there are sellers out there too liquidating their investments into cash as you can use cash in times of a crisis but not so much Gold. This is especially true when going to supermarkets to purchase toilet roll, hand sanitiser and cleaning products! 

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@Bopperz,

I adopt trend following principles. My trades will be longer than most as I will try and stay in as long as I can until the trend reverses and my stop loss is executed. 

I know you are asking about pullbacks but the problem I have with them on Commodities and Cryptocurrencies is that they do not always adhere to Fibonacci retracements or any other trading theory. Monitoring the price action of the assets you are interested in is key. So for you, Silver, is the asset and I have to say it is one of the 'Strongest Trending Assets' right now on the 'short' side. There is nothing like good old fashioned 'Following the Tape' and monitoring the price action. This will help you to identify any pullback. 

For me on a strong trend I tend to look for and would ideally like to see 'Higher Highs' and 'Lower Highs'. I have no doubt that Silver will see a 'Short Covering' rally at some point and you may wish to consider using that as an opportunity to initiate a short trade. The problem anyone who is not trading Silver on the 'short' side right now is that they have no idea where the bottom is and if they get it wrong then they can get themselves into a pickle. 

I use the 'Daily' timeframe but I will look at the 'Monthly' and 'Weekly' timeframes as I am a longer term trend trader. I want to decrease the chances of volatility taking me out of a trade when my directional position is correct on the trade. However, for pullbacks I will switch to 4 hour and 1 hour charts as the pull back against say an uptrend or in Silver's case downtrend. 

The other thing I tend to look at is the Relative Strength Indicator (RSI). This could help you to focus on where a potential pullback may occur. There are several indicators and signals I use but it is which indicators and signals are right for the way you want to trade. There is no one answer or magic answer and it all depends on what you trading methodology / trading strategy is. 

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Hi,

Thanks for the post @TrendFollower.

Looks like Silver is in the pullback. And now i'm second guessing myself, is this the start of the recovery! I will wait and see how this moves today.

If it keeps moving up = Stay out.

If it drops towards previous low = Get short.

Spot Silver_20200320_09.56.png

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Yep.  Definitely screams 'recovery'.

472268455_SpotSilver_20200320_10_43.thumb.png.5753f408dd26100605a7124b78bd528c.png

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@Bopperz,

No worries. 

Do not try and guess anything. If you want to trade Gold then ask yourself why and what is the price action telling us? Apologies but this hardly warrants a recovery!!!

Monitor the price action and construct a trading plan specifically for Gold if that is which asset you want to trade. Have a plan in terms of how you intend to trade Gold. Think carefully about your entry and exit points. What sort of volatility are you looking for? More importantly which direction are you going to trade Gold in and more specifically why? Think about which directional movement increases your chances of a successful trade and increases your odds and probability of profiting from the trade?

Sometimes when the directional movement of an asset is unclear then it is best not to trade that asset. 

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If one is a Gold bull and Gold does not race back up over $1600 by the end of the week, those Gold bulls should be worried.

There should be more 'long' buyers than 'short' sellers for Gold right now even if you take the margin call situation out of the equation. Simply put there should be more buyers than sellers next week and Gold should be higher by the end of the week than what it starts at. If not then for me it will be a long term bearish signal for Gold. 

I appreciate some of you will not appreciate my thoughts and comments (above) but sorry but if the current market turmoil and potential future economic problems are not enough even for speculative capital and the herd to drive Gold prices upwards and for countries to start buying Gold rather than selling it then it is hard for me to anticipate Gold going even close to $2000 anytime soon. 

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Gold's lowest point today is $1482.58. To me it seems like money is being kept in Cash rather than any safe haven as many will simply not have the ability, know how or understanding of how to invest in Gold digitally online. This means Gold simply cannot shoot up in crisis like these as the majority of people in the world understand Cash over investing in precious metals and perceived safe haven assets. 

Gold's price behaviour has confirmed to me why I am not a long term fan of Gold and why I think there are other assets which can outperform Gold over the longer term from an investment perspective. 

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