Jump to content

Potential 'Long' Gold Trade

Recommended Posts

If Gold continues its upward trajectory then I am expecting a sharp spike in Silver very soon. Silver has a lot of catching up to do!

Share this post


Link to post

@Chris Beauchamp,

You have stated the following in your latest posting on Gold today on IG's main home page:

Gold returns to January peak

The gold price has moved back to the $1326 highs seen three weeks ago.

From here the price will break into the $1326-$1365 range from the first few months of 2018. Intraday pullbacks towards $1316 are likely to find support.

You state 'WILL' break... I am not suggesting you are wrong and I actually agree that I think it is likely to hit such levels. However, may I ask if possible if you could provide more analysis and detail behind such strong convictions as otherwise there is very little value in what you state. 'Will' is a very strong word which infers it will definitely occur and I am sure many of us will agree that the markets do not always behave like one expects.

Share this post


Link to post

When looking at the 20, 50, 100 and 200 day moving averages for Gold then the 20, 50 and 100 are all sloping upwards and the 200 is sloping sideways. This to me suggests a strong trend and if and when the 200 begins sloping upwards along with the others it will be in the midst of a a very strong rally. 

Silver however is behaving like it is confused whether to behave like an industrial commodity, precious metal or even both.  50 and 100 DMA's are sloping upwards. So too is the 20 DMA but it is beginning to slope slightly sideways. The 200 DMA is sloping downwards.

If you look at Silver's longer term timeframe then you can see that it could be argued that it is still in a longer term downtrend with a shorter term bias upwards at the moment. It would need to hit around the $17.00 level for this to change. Gold on the other hand would need to surpass the $1350 level for it to force the 200 DMA to begin changing course.  

Share this post


Link to post

There seems to be a disconnect between Gold and Silver which is rather interesting. Silver does not want to play with Gold today! 

Share this post


Link to post

There you go Silver has woke up and now following Gold’s lead.

As the margin requirements are higher on Silver than Gold (more or less double) rather than trade both one could trade Gold with increased leverage. 

Share this post


Link to post

@psycho,

I am responding to your Bullion Vault question on another thread in my own thread which I created as I do not want to clash with the creators of other threads. I have strong opinions and I am not scared to post them even when I may be wrong.

To answer your question, yes I would have conducted some form of due diligence back in 2006 - 2008 period where I invested in Gold via Bullion Vault. From memory I paid charges for them storing it so I never took physical delivery. This was a long time ago so I hope you can appreciate my sketchy memory!

They are a big player in this industry and in my opinion at the time reliable and trustworthy. I cannot comment about recent reputation as I have not used them for over 10 years. I am sure they have got bigger and more reputable but you would have to check. 

 

Share this post


Link to post

@OceansJess,

Yes you are right. Gold is doing something and that is going up in price since August 2018. It is making new 'higher lows' and new 'higher highs'. The trend is firmly upwards and it would be a good time to consider going long but you may wish to wait until the next drop/correction for a better entry point but that is your decision to make.

You can by all means ask your friend who bought the physical gold and establish what they actually know about Gold? Where do they store it and what are the costs associated with the physical purchase and storage? 

In terms of how high Gold will go then no one can answer this question and certainly not me. None of us have a crystal ball and none of us can predict the future.

In my personal opinion I think it will clear $1350 short term. Medium term it will clear $1355.91 but long term I do not know. It could go as high as it wants depending on the economic events that take shape around the world. From my personal experience big bullish trends love psychological points and round numbers to surpass so longer term $1500.00 could be a target should things get worse around the world.

For me it is just about letting my winners run and only exiting once the trend has firmly reversed and not until then.

Share this post


Link to post

lots of talk & charts on twitter about this breakout 

Capture gdx.PNG

Share this post


Link to post

it's "Bullish"  people are long Gold 

Share this post


Link to post

As ever it seems with a move in gold the talk is of China building up reserves but also this time round there is talk of the expectation of a dovish Fed minutes release today being priced in.

? sell order around 1360 with a stop around 1380 anyone?

973303043_XAUUSD()Daily.thumb.png.a0915d880710a0c0bc182e56821ee6ad.png

Share this post


Link to post

@Caseynotes,

I can see your logic behind such a suggestion but not for me. I am long both Gold and Silver and if anything will add on any corrections as long as the trend upwards is in tact. 

Also I do not want to go against this very strong and bullish trend upwards. I also do not want to be clever and contrarian and try and fight against a trend which is in full flow.

Most time traders trade against a trend they will end up with losing trades on balance of probability and odds.

Share this post


Link to post
5 minutes ago, TrendFollower said:

@Caseynotes,

I can see your logic behind such a suggestion but not for me. I am long both Gold and Silver and if anything will add on any corrections as long as the trend upwards is in tact. 

Also I do not want to go against this very strong and bullish trend upwards. I also do not want to be clever and contrarian and try and fight against a trend which is in full flow.

Most time traders trade against a trend they will end up with losing trades on balance of probability and odds.

 

Capture tiyf.PNG

Share this post


Link to post

Gold is going to have to fight it's way through this overhead resistance, but the word on the street is that the buying of the last 2 days is short term speculation in expectation of dovish Fed minutes tonight with a target to get out just under the resistance level. Not really my type of trade either but will be interesting to see if it plays out. 

Share this post


Link to post

@elle,

Excellent post. Totally agree.

There is no reason to short either Gold or Silver right now based on price action. There is no bend in the trend which has appeared on this recent upward move. When it does then @Caseynotessuggestion may be worth consideration albeit with slight differing sell and stop.

Share this post


Link to post

@Caseynotes,

Yes I read that very point this morning. There may be selling after the minutes tonight but equally Silver has not caught up yet so I really do not know. Put it this way if after the minutes Gold and Silver continue rising and do the opposite of what is being reported by various media sources then game on. 

Share this post


Link to post
Guest Pikto
12 hours ago, TrendFollower said:

@OceansJess,

Yes you are right. Gold is doing something and that is going up in price since August 2018. It is making new 'higher lows' and new 'higher highs'. The trend is firmly upwards and it would be a good time to consider going long but you may wish to wait until the next drop/correction for a better entry point but that is your decision to make.

You can by all means ask your friend who bought the physical gold and establish what they actually know about Gold? Where do they store it and what are the costs associated with the physical purchase and storage? 

In terms of how high Gold will go then no one can answer this question and certainly not me. None of us have a crystal ball and none of us can predict the future.

In my personal opinion I think it will clear $1350 short term. Medium term it will clear $1355.91 but long term I do not know. It could go as high as it wants depending on the economic events that take shape around the world. From my personal experience big bullish trends love psychological points and round numbers to surpass so longer term $1500.00 could be a target should things get worse around the world.

For me it is just about letting my winners run and only exiting once the trend has firmly reversed and not until then.

What would you recommend investing in? Daily spot gold? Etfs?

Share this post


Link to post
15 hours ago, TrendFollower said:

@OceansJess,

Yes you are right. Gold is doing something and that is going up in price since August 2018. It is making new 'higher lows' and new 'higher highs'. The trend is firmly upwards and it would be a good time to consider going long but you may wish to wait until the next drop/correction for a better entry point but that is your decision to make.

You can by all means ask your friend who bought the physical gold and establish what they actually know about Gold? Where do they store it and what are the costs associated with the physical purchase and storage? 

In terms of how high Gold will go then no one can answer this question and certainly not me. None of us have a crystal ball and none of us can predict the future.

In my personal opinion I think it will clear $1350 short term. Medium term it will clear $1355.91 but long term I do not know. It could go as high as it wants depending on the economic events that take shape around the world. From my personal experience big bullish trends love psychological points and round numbers to surpass so longer term $1500.00 could be a target should things get worse around the world.

For me it is just about letting my winners run and only exiting once the trend has firmly reversed and not until then.

What would you recommend to invest in? Daily spot gold? Monthly? Etfs? What's the most favoured option in your opinion?

Share this post


Link to post

@Pikto,

Investing and trading are both very different. You specifically use the word invest and I do not invest in Gold. In fact I do not like Gold as an asset. The only time I have invested in Gold is over 10 years ago via physical storage through BullionVault. I also invested in many years ago Merryl Lynch Gold & General which then became Blackrock Gold and General and JP Morgan Natural Resources. However, I have not held such investments for many years now.

At this moment I am trading both Gold and Silver using IG's Spread Betting account. I am trading them on the 'long' side based on an upward trend and its price action. 

I cannot recommend any investments in Gold as I do not invest in Gold myself and I feel there are far more better investments to make over a 5, 10 and 20 year period which will outperform any Gold investment. 

You need to know what your investment timescale is? You need to research the different investment options in Gold and look at the performance variances between them all and conduct a contrast and compare exercise. You need to be clear on what your reasons are for wanting to invest in Gold? Why Gold over other assets and investments?

The more riskier play in Gold is small Gold mining companies. I personally do not like them as far too high risk with liquidity issues. There are larger Gold producers that may even pay dividends but again I do not invest in Gold directly so I cannot really suggest any recommendation.

It would be like recommending a book that I have not read or a film that I have not watched. 

Share this post


Link to post

@OceansJess,

No problem.

Yes getting familiar with trends is a very good idea. 

Yes it is tricky. In fact it is very difficult and yes there is a lot to learn. 

If you put in the effort, have dedication, passion and enthusiasm then it will certainly help you when trying to read, research and learn. 

  • Like 1

Share this post


Link to post

@Pikto,

When it comes to trading I can only comment on what I am doing. I am trading Gold and Silver on the 'long' side using IG's Spread Betting platform. This allows me to trade them both tax efficiently and with the use of leverage. Once in profit then you can initiate a trailing stop. 

Silver tends to outperform Gold in a strong bull market in terms of returns but the margin requirements are more attractive on Gold than Silver, especially when Silver tends to follow Gold and Gold generally takes the lead. This is more true when you look at the daily points increase on both. Using leverage on Gold by x2 still makes it cheaper than Silver on x1 if Silver's daily point increase is around 50% more than Gold. 

Share this post


Link to post

So the logic of the short trade idea was good (see my posts above) but it didn't pan out and serves to highlight the difference between investors and speculators. To recap, the idea was that the sharp rise from Tuesday onward was due to speculators entering the market betting on a dovish FOMC minutes release driving price up to resistance where they would exit causing a correction down (sell at 1360 - stop loss at 1380).

But the minutes were more hawkish than expected so the speculators abandoned their positions immediately hence the drop back down to near the Tuesday morning level. The investors are not selling and quite right too, the sellers are the speculators who got in on Tuesday looking for a short term gain.

image.thumb.png.7a1a8c9e8e938afb6faed66913c0b8df.png

  • Thanks 1

Share this post


Link to post

@Caseynotes, yes it was an interesting idea and I could see you logic behind it.

There has been a small healthy correction and Gold is trading $1328 at the time of this post which is down from the $1341 levels. 

I do think there is another leg up to come very soon as US indices are looking a bit 'exhausted' from a trending perspective and they are clearly waiting for news either positive or negative to steer them to their next destination. If the destination is downwards and it is a quick sharp move then I can see Gold providing a quick sharp trend upwards. 

What is interesting about this particular Gold trend since August 2018 is that it has moved up along with US indices moving upwards albeit a strong drop in this journey.

There is a myth that Gold and the US Dollar cannot rise together and that Gold only goes up when the US Dollar is weak. There are instances when both the US Dollar and Gold have risen together and when some of you may want to look at what happened to Gold when this last occurred. I shall leave it at that. Suspense!

 

Share this post


Link to post

Join the conversation

You are posting as a guest. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
You are posting 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.


  • Member Statistics

    • Total Topics
      7,251
    • Total Posts
      35,940
    • Total Members
      45,954
    Newest Member
    Joe86
    Joined 20/08/19 11:38
  • Posts

    • Hi greetings from Singapore & finally someone started a thread on HSI.   😗
    • I am not so advanced like Mercury here but I could at least understand half of what he is talking about. Yes it did trigger me to consider the possibility of the bullish trend pushing price to 30000 levels.
    • Ah! The $64 million (billion, trillion) question! Where's the inflation? I'm afraid I can only offer my own thoughts on that....there are far better qualified people to be had elsewhere. Here are my personal thoughts/threads however.. QE was used (expanded the Fed balance sheet) to purchase US Treasury debt. Elsewhere same reason. It was intended that it would be rolled over as it matured and sold back to the market. Now there's doubt about that or at least some of it. It could just disappear. You're effectively buying your own debt...nice game, nice game....and if you can do that (with one hand on the money press) then you want it as cheaply as possible. If you're effectively the only buyer, you own the market and that itself drives yields lower. Wash,rinse,spin. Throw in some safe haven moments and you get to where we are today. Throughout the whole of the experiment, and that's what it is because no-one knows how this ends (although I expect badly) it became clear that the elites are getting richer...they were the ones with the assets after all. For assets include everything...stocks, property, antiques, paintings, wine etc. Everything Trump has in other words!. Their pay (board level) also got a huge boost in my opinion from performance related share prices due to unprecedented share buy backs - this is on going because credit has never been so cheap. Your pay almost certainly didn't increase. In fact in real terms it went backwards. Lots of studies support that thesis both in US/UK/Europe. The policy is now driving rates well below zero. Just when you thought rates can only go up from here (2016 low) they actually went lower and bonds were and still are the place to be! Wish I had bought Reagan's long term debt. I think this will continue and it links in with my thoughts about Japan the past two decades. Keeping rates below inflation (and they all do) effectively forces you to do your consumer bit and that was the justification/hope/smoke screen, take your pick!. We'll grow our way out of it - scenario 2 a few posts back. The wealth divide is a real concern now and they know it. In consumer led economies, if the consumer had access to that increased money supply and provides it with some velocity (i.e. gets it moving around the economy) THEN you get inflation. You don't have access to it.........yet. Assets are being held up by funny money. Any whiff the central banks (i.e who now ARE the market) will dial back causes immediate stock market roll overs. Draw your own conclusions. The other thought is simply this. Think of deflation as air leaving your tyre. You're pumping like mad to get it back in but however hard you try the tyre is getting flatter! The hole's too big. Deflation wins.....or if you manage to stabilise the pressure then stagnant growth at best. Possibly stagflation 70s style. Get the plaster on and whey, hey! Hyperinflation here we come. Hold gold. Just my penny worth!...and apologies for the length.
×
×