Each week longleaftrading.com will be providing us with a commodity chart of the week as analyzed by a member of their team. We hope that you enjoy and learn from this new feature.
Gold has been a frustrating market for a lot of traders for the last few months. If you are the buy and hold type or one who tries to find dynamic trends to capture, gold has not been an attractive market for you. Gold, however, is now getting interesting and could provide a move this week, especially if markets get negative and a flight to safety bid enters the market.
The market has been building a solid base since the January lows and technically we are now getting to a point where a move could occur if we can penetrate the upward portion of the wedge you can see in the chart above. The top of the wedge and the 50 day moving average both come in right at 1685/ounce and a close over that level would bode well for gold if it is breached.
There are many ways you can approach being long gold, depending on your appetite for risk and your general preference for trade strategy.
As always, feel free to contact me directly with any questions or comments regarding trading in the Futures Markets or if you have specific questions about the material in this report. I can be reached by email at
te****@lo*************.com
or by phone at (866) 372-6926.
Thank you for your interest,
Timothy Evans
Chief Market Strategist
Phone: (866) 325-9873
www.longleaftrading.com
There is a substantial risk of loss in trading futures and options. Past performance is not indicative of future results. The information and data contained in this article was obtained from sources considered reliable. Their accuracy or completeness is not guaranteed.
Oh yeah, last year's European meltdown was hardly a safe haven move towards gold as well.
Gold hasn't been a "flight to safety" in how long now? Why is this myth perpetuated? 1987 crash, gold collapsed. Ditto Orange County Bankruptcy, 1997-98 Asian contagion, just after 9-11, and the 2008-09 meltdown to name a few.
Obviously there is something else propelling the secular bull market in the metal, but "flight to safety" is certainly not it. Inflation hedge, could happen. China buying gold, now you are talking. "Does well during uncertainty" is another false non sequitur, there has never been a time in history when everything is certain.
Thank you for the response. Flight to safety has been a very important component to the bull market we have been in over the last decade. That has attracted a significant amount of capital to the base of the gold market. A lot of that money has been removed from gold as yield is being sought in other market at this time. The money that has been removed from the safety trade will return, as cycles continue. While I appreciate your "response" and your "suggestion" that China will play a role in the long-term upside of gold is probably correct, as they continue to diversify out of paper.
I think you need to add a little context to where we are at this time to anticipate the next move. If your goal is to write a piece of economic analysis after the fact, then all your historical points are well taken. I am simply looking at where we are in the cycle and seeing the fact that an influx of money from the safety side could contribute to the market breaking the critical levels charted.
At the end of the day, if we clear it, I am long. Book will follow after.