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Potential 'Long' Gold Trade

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@elle,

ūüĎć

I always find that keeping charts simple and basic can be at times more effective and offer more clarity. As you can see you chart is telling a 'narrative' for those who are interested. The chart is now showing more factors to seriously consider when deciding upon a trade or not. 

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There may be profit taking with it being 31st December 2018 as the market approaches closing time hence why stop losses cannot be too tight as otherwise traders (trading a longer term trend) will simply get stopped out.

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The latest update for closing prices at the end of 2018 were as below:

My 'Long' Gold trade is up 33 points.

My 'Long' Silver trade is up 76 points.

I am very happy with how both of these trades are going. They are going according to my plan unlike the 'short' trade on the S&P 500. I am expecting a major pull back at some point due to the sharp move upwards we have witnessed on both. There will be traders profit taking and stop losses being triggered as a result which will cause the pull back to be quite large. We should then see the trend and move upwards resume. I expect this pattern to continue at every major sharp upwards move on both but the price behaviour will confirm or reject this notion. 

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I think it is imperative that Silver's price action is trending upwards as this shows support for the Gold upward price movement.

It also tells me that capital could be flowing into 'Precious Metals' for various reasons. One could be 'Safe Haven' status. The other could be extreme value based on the declines seen in previous months and years to a certain degree. It could be simple accumulation at such low prices.

Now if you add investors, traders and institutions then you can see the potential for this trend.

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2 hours ago, TrendFollower said:

I think it is imperative that Silver's price action is trending upwards as this shows support for the Gold upward price movement.

It also tells me that capital could be flowing into 'Precious Metals' for various reasons. One could be 'Safe Haven' status. The other could be extreme value based on the declines seen in previous months and years to a certain degree. It could be simple accumulation at such low prices.

Now if you add investors, traders and institutions then you can see the potential for this trend.

in which  to gold buying sir

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@gautamhait,

Please accept my apologies but I do not understand your question as it is not written clearly. 

First of all, I am not physically acquiring Gold. I must make that point as clear as I can.

I am trading Gold via IG's Spread Betting platform and looking to trade and profit based on the price movements upwards using leverage to increase my profit potential on the trade. I am doing the same with Silver as well. 

I hope that makes sense. 

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56 minutes ago, TrendFollower said:

@gautamhait,

Please accept my apologies but I do not understand your question as it is not written clearly. 

First of all, I am not physically acquiring Gold. I must make that point as clear as I can.

I am trading Gold via IG's Spread Betting platform and looking to trade and profit based on the price movements upwards using leverage to increase my profit potential on the trade. I am doing the same with Silver as well. 

I hope that makes sense. 

I have a gold sell 1279 .how much in sl sir

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@gautamhait,

I am very sorry but unless you are able to write in plain, clear and simple English then I am unable to assist you as I am finding it very difficult to read and understand your posts. Are you able to get someone who can write in English to post on your behalf?

2 hours ago, gautamhait said:

have a gold sell 1279

Does your comment above mean you have opened a 'Short' Gold trade at $1279? I do not want to guess or assume. 

2 hours ago, gautamhait said:

how much in sl sir

What does 'sl' mean? I have no idea what you are referring to here. It does not make any sense to me. 

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I think Platinum looks excellent value from a price perspective compared to Gold. This cannot last for too long. At some point Platinum price needs to catch up with Gold's when all the 'Fundamentals' begin lining up. I shall keep a close eye on the price action of Platinum to see if any upward trend can be identified early. 

I also think some of the capital in Palladium may shift to Gold and Silver as they have the stronger trends now. Palladium was way ahead in the race against Gold and Silver but the dynamics have changed. Also the trend looks a bit 'toppy' to me so I think money may flow out of Palladium and into Gold and Silver. This is just my personal opinion so I could be totally wrong but it is just a hunch I have. 

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On ‚Äé30‚Äé/‚Äé12‚Äé/‚Äé2018 at 16:45, elle said:

No position, just a chart  FWIW  

Capture gold.PNG

currently

Capture gold.PNG

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Catching the right trends at the right time¬†is all about timing and awareness. It is about following the price and being able to execute the trade regardless of ‚Äėmarket noise‚Äô. The media tend to react to trends once they have been firmly established and the smart money is in them. This then brings another wave of investors and traders that do not want to miss out thus amplifying the trend upwards further.¬†

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I have hit the following today at the time of writing this post:

  • Long Trade in¬†Silver up 104¬†points
  • Long Trade in Gold up 43 points

I am expecting a large correction with profit taking before the trend upward resumes but both trades doing very well. I am glad I opened the Silver trade as well. My experience told me that Silver would outperform Gold and it has done exactly that as the results to date (above) show. I opened both trades at the same time on the same day. As I have mentioned before - Silver trend to outperform Gold when in a bull market. Its price performance behaves like Gold but on 'Steroids'. 

Also I have stated in other threads, markets love round numbers when trending. I predict that Gold will go for $1300.00 before the big correction comes. The one thing to remember is to let your winners run and not to exit too early. The correction will not necessarily be a trend reversal so one has to take the price action into consideration. Also Silver could try and hit $16.00 but I think it will correct prior to that but let's see as it has hit $15.00 after all!

Upwards trends can last a lot longer and be more bigger than one thinks. Riding trends is one of the easiest ways to trade. It does not require any complex technical analysis, language and abbreviations that many do not understand or any superior level of knowledge. It does not require lots of charts and lots of lines then followed by more charts and more lines. It does however require living and breathing the price action (sort of like a religion) with discipline and sound risk management. It does requires hard work as nothing is easy so effort is a necessity. I think determination and passion for trading can go a long way as it pushes you to learn and follow the assets you are trading.

Trading trends can be learnt by spending the time reading, practicing and learning to follow price action and identifying trends based on signals and indicators. Not all trades will be successful but as long the successful trades make more profits than the losses on the unsuccessful trades then that is the key metric to measure the performance on. Also it means having to carry out less analysis. You can leave the trades to their own devices. For example on a long trade if the price goes below a certain price then your stop loss will be triggered and if the price keeps on going up then you simply do nothing and merely watch. I tend to initiate a 'Trailing Stop' once in profit so that I know I cannot lose on the trade as if the 'Trailing Stop' is triggered then it will be with a profit. 

 

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Here is how my live trades in Gold and Silver ended the week.

  • Long Trade in¬†Silver up 97¬†points
  • Long Trade in Gold up 35¬†points

If you look at my previous post (above) then there is a very small drop in the number of points which is to be expected of course. I would still expect further drops in points before the next leg upwards potentially resumes as there is no guarantee that it will.

So far my assessment of both trades are that I am happy with the way they are performing. I am trading with the trend and the price action is going upwards hence the decision to go 'Long' is the correct one. Has the price continued increasing since entering both trades? Yes it has. Is there a trend reversal? No there is not so far.

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On ‚Äé03‚Äé/‚Äé01‚Äé/‚Äé2019 at 09:39, elle said:

currently

Capture gold.PNG

That level  (yellow circled)  has "previous". Price often reacts to levels it's reacted to before

Capture gold.PNG

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@elle,

The 'yellow circles' are interesting. It seems price has gone down after the yellow circles then followed by a move above it but it is difficult to read too much into them.

Market conditions can be different, economic situation can be different, sentiment can be different and price behaviour prior to the 'yellow circles' can be different.

Good spot though!

 

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Based on markets rallying especially the US indices then one may have assumed that Gold and Silver would face heavy selling. However the fact that they have not potentially indicates to me that positions could be being built for any possible move upwards. Having made that assumption it is just as feasible with the way markets are behaving at the moment for serious price drops in both Gold and Silver. 

So how are my live trades doing at the time of this post?

  • Long Trade in¬†Silver up 95¬†points
  • Long Trade in Gold up 36¬†points

They are more or less similar to when I last posted an update though the 'daily' charts are indicating a drop downwards. This correction is both necessary and healthy for any upward trending move to last.

Both these trades are profitable on paper at the moment and for me it is about letting my winners run and not taking profits too early. 

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@Caseynotes,

Technical analysts are suggesting that $1279 level will be crucial. I recall reading an IG article very recently (not sure how much I value the IG Analysts) but they too were suggesting this level as being critical to determine the future path of the shiny one. If Gold goes below this price then it could prove bearish but if it stays above then it may set up for the next leg upwards. I think Gold will attempt $1300 very soon. US Earning Seasons is approaching and the if results are not as good then that may be a driver for Gold prices to drive upwards. 

After the recent rally in Gold prices (and Silver too) I would expect some form of consolidation, profit taking and stop losses triggering and that is what we are possibly witnessing now.  

Platinum is showing similar price action right now after its recent move to catch up. Palladium is slightly different in that though it is a 'Precious Metal' it has some valuable industrial uses in economies around the world which makes it unique. Its chart is very interesting. 

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On ‚Äé06‚Äé/‚Äé01‚Äé/‚Äé2019 at 15:46, elle said:

That level  (yellow circled)  has "previous". Price often reacts to levels it's reacted to before

Capture gold.PNG

 

Capture gold.PNG

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@elle,

You may be on to something or your inference may be correct but I would like to offer a counter argument (where I could be wrong).

You state the yellow circles on your chart has 'previous'. I would like to add that 'Historical performance does not necessarily mean that it will be repeated in the future'. Just think of those trends which are formed which make new higher highs, take out its 52 week high and greater long term highs. Those trends defy historical price behaviour.

You then state the following:

16 hours ago, elle said:

Price often reacts to levels it's reacted to before

I would like to offer a counter argument to that which is 'Price does often not react to levels it has reached before'. The word often is key as it is as likely to react as it is not to react. It can go both ways. I am not suggesting you are wrong. I am merely presenting a different side to the statement. 

Now when both the above points are combined then this is where 'Fundamental analysis and Economic Assessment' comes in when it comes to specifically Gold. I have repeatedly stated that I am not a fan of Gold. So why am I trading it? Firstly and foremost the price action and my specific reasons for entry are earlier on in this thread. To support that there are economic reasons as I have previously discussed such as the US Dollar, US Federal Reserve, Monetary Policy, Brexit, Economic Uncertainty, Potential Recessions, etc.

When you combine the fundamentals to the price action the narrative becomes slightly different to previous price behaviour as there are 'New Ingrediants' which tell a slightly different narrative when it comes to price action.

So for example if you make a cake using the same ingredients and in exactly the same quantity then the taste may still not be the same but will be very similar. Now if you change the ingredients or change the quantity used the taste will be different. The result will still be a cake but the taste will be different. Gold's current price behaviour has a new narrative and backdrop that is more probable (no guarantee) that can make the price react differently to historic price action. The UK will be the first country to leave the EU and Trump is Trump! 

Now things may play out like the inference @elle is making in the charts with the yellow circles so let's see.

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@TrendFollower from what I can see , price has reacted to that level ( there has been a period of consolidation ), it's now just a question of what happens next. I assume you took my earlier suggestion to mean that price would now fall back.

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@elle,

That is the inference I make from your post. You are right we must wait to see what happens next. It may well be that the price begins declining as per historical behaviour but it could be that it creates a 'new history'. Time and price action will tell us very shortly. 

When fundamentals align with price action then I believe one must put aside historical behaviour as new price behaviour is created. Gold has the potential for this but it may not fulfil this potential. It may be the Gold reverts back to historical movements. 

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So where are we with my live Gold and Silver trades? The current update is as below:

  • Long Trade in¬†Silver up 92¬†points
  • Long Trade in Gold up¬†46¬†points ÔĽŅ

Remember I have not profited from either of these trades until I actually physically take the profits. These are just mere paper profits at the moment. Also I must take the IG daily interest charges from any profits to get more accurate profit figures.

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I was reading an interesting piece in Reuters today where it mentioned the three reasons why Gold may be about to see a bull market. It was suggesting that countries like India and China were providing strong physical demand as one of the reasons. The second reason it was suggesting was that central banks were making robust purchases. Finally the third reason it was suggesting was an increasing demand for Gold as a 'safe haven' investment. These were the reasons behind the previous gold rally back in 2008 and it seems similar signs are appearing. If this is the case then it could increase the level of speculation for Gold and trend followers could begin appearing leading to 'herd behaviour' which is great for traders who get in early into trades when large, strong and long trends play out.

A weak US Dollar added to the mix provides a platform for Gold to 'shine'. Now potential economic slowdown, recessions, interest rate rises, etc. all cause the potential for Gold to appreciate in price more probable. Now you have the US Government shutdown and Brexit cause uncertainty in the US and UK also adding to a potential shift in capital into precious metals.

In India it is approaching the wedding season which is usually sees heavy demand for Gold. Apparently both China and India are seeing a 10% rise in demand of Gold from this time last year.

The price action will react depending on how the above scenarios play out. 

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On ‚Äé11‚Äé/‚Äé01‚Äé/‚Äé2019 at 20:18, elle said:

 

Capture gold.PNG

here's a closer look with some Moving Averages -   something's got to give soon !   Looking "Wedgey"

Capture gold.PNG

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@elle,

Yes I agree. The trend strength has declined which one would expect after the recent sharp rise. 

In my personal opinion the thing that is stopping any further rise in Gold is due to capital being allocated to equity markets hence their recent rise after the large drop. It is when that very capital leaves equity markets and a small amount of that ends up in Gold is when the really large rise will come. 

If equity markets continue rising then I fear that Gold could price could begin another decline. 

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consolidation phase.

although all the other market news events are sort of coming to a wind down now. I'd consider booking some profit.

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@cryptotrader,

Yes I must admit as I have watched the recent trend weaken I have considered taking profits but then remembered all the times historically when I have done that and the next leg upwards comes which is even stronger and sharper. 

This is why I wait until the trend reverses which is not the case in Gold yet. It is why I will wait until the trend is confirmed before buying and which is why I end up with the middle bit of the trend that I trade. I will never get in at the bottom or sell at the top.

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Silver seems to be correcting stronger than Gold. Silver has just touched (at the time of posting) its 20 DMA downwards.

Gold is looking far stronger at the moment from a chartist perspective but Silver tends to be someone who catches up later on and catches up hard and fast as we have seen on the recent rally. 

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