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Gold Rallying On Back of US Dollar Gains

July 21, 2014 in Trading with Other Commodities

The gold price has rallied strongly in recent weeks to hit a high of $1322 per ounce in recent weeks. Renewed demand from Jewellers and producers together with increased global political tensions have caused the yellow metal to rally from lows at $1193. However despite recent gains the metal still remains far from the recent highs of 2011 when it looked certain to hit $2000 per ounce.

Give the metals fall from grace over the past 24 months the question as to whether the current rally can be sustained is one that is on many traders lips.


Why Investors Like Gold

Long before the Forex markets the world traded and valued its good and materials in gold. This historical sentiment that surrounds this metal perpetuates, and even in today’s world of FIAT currencies, gold is still seen by many as the ultimate store of wealth. Fear of inflation and the devaluation in paper currencies sees money move into this market. As global uncertainties increase, so too does the demand for gold.

How Much Has The Price Changed?

The price of gold has risen sharply in recent years as the metal has awoken form a long term bear market. The beginning of  new bull market can be traced back to 2001. The preceding 10 years saw the price barely move. However since this time the price of Gold in USD has since risen from a low of $385 per ounce to a peak of  $1889 at the start of 2011.

A long or Call trade on the gold price would have yielded high gains for the savvy investor.

Can The Current Rally Be Sustained?

Following falls from the high set in 2011, the Gold price has looked firmly in the grip of the bears. However the bigger picture may look brighter for trading gold. Maintaining a price above $1300 looks constructive and a push and a break back above $1400 may provide the impetus for a more sustained price rally.

From a chart perspective price action looks to be forming an inverse head and shoulders pattern. A move towards $1400 would provide support to this view.  Gold certainly seems to have found a floor at the current level. With further support from a rising USD and increasing political unrest and financial worries, it could be set for further gains.

Basics of Online Stock Trading

June 5, 2014 in Investing, Trading with Other Commodities

In recent years, positive trends in consumer credit activities have helped create major shifts in the tendency to place retail investment trades online, rather than on the floor of a traditional stock exchange.  There is a wide variety of ways to start doing this.   Already, there is a large and growing number of regulated brokers that offer access to all of the major asset classes with trading platforms that can be managed through PCs and mobile devices.

Positioning for Market-Moving Events

The nuts and bolts of online trading are relatively easy to grasp.  Trades can be placed with quick efficiency, then stop losses and profit targets can be executed as a means for conservatively managing your market positions.  But there are deeper factors that must be understood before any real money is put on the line.  For example, markets tend to become more volatile and unpredictable when a major data or news event has been released and traders are forced to re-position.  But there are also ways of approaching the market so that you are less likely to be caught off-guard when market start to move more quickly.  Given the fast-paced (and often automated) nature of financial markets

One of the best ways to position yourself for market-moving events is to monitor an upcoming forex economic calendar.  This will give you an idea of when a macro data release or important central bank meeting is scheduled.  In daytrading, it is generally it is a good idea to have smaller exposure during these circumstances because there is less predictability in the market.  For those with longer term strategies, position sizing is less impacted by the day-to-day fluctuations in market valuations.  But, in most cases, it is best to adopt options strategies as a means for protecting yourself against abrupt changes in the market.

Focusing on Sector Activities

Last, it is generally a good idea to have a firm understanding of how each asset sector relates to one another.  Most people tend to have some understanding of the way the stock market works, but pay less attention to how things like forex market and precious metals can influence the broader financial environment.  For precious metals, this means that a stock investor might want to monitor the activity in the SPDR Gold Trust ETF (NYSE:GLD) or the iShares Silver Trust ETF (NYSE:SLV).  In forex markets, it is a good idea be aware of the developments in the PowerShares DB US Dollar Index Bullish ETF (NYSE:UUP).

For stock traders, more options are in place.  You can always trade an ETF that tracks the activity of a global benchmark, like the SPDR S&P 500 Trust ETF (NYSE:SPY).  Alternatively, online stock traders will also have the opportunity to trade in individual company names like Apple, Inc. (NASDAQ: AAPL) and Google, Inc. (NASDAQ: GOOG).  But all of these asset types influence one another, and we can see one example in the gold chart shown below.3.PNG

For example, consider the impact of a rising gold price.  This trend was accompanied by a downtrend in the US Dollar, as investors sold Dollars for gold in anticipation of rising inflation.  For these reasons, it is generally a good idea to have a sense of where gold prices are so that you can make a suitable gold forecast for the period ahead.

Gold drops as Ukraine appears to de-escalate

March 19, 2014 in Trading with Other Commodities

Russia’s annexation of Crimea became a fait accompli once the region voted through a referendum to secede from the Ukraine and become a part of Russia. Putin, pleased with the result, expansively assured Russian Parliament that he has no intentions of taking over other Ukrainian territory, as suggested by speculative rumours.

These developments have taken out a major pressure point in the geopolitical situation surrounding the Ukraine, and as a result, the recent ‘safe haven’ appreciation in gold has taken a big hit. Markets are now factoring in de-escalation in the tensions between Russia and Western powers.

Gold has fallen for the last three sessions, primarily as a result of the cooling in Ukraine, but also after the yellow metal corrected technically from the recent highly overbought levels, nudging investors towards taking some recent profits off the table. Gold is currently trading at $ 1344.


On the daily chart above, however, we note the emergence of a bearish “three-black-crows” candlestick formation as shown inside the golden ellipse. Interestingly, the price has reversed from the upper boundary of the rising channel in effect since December 2013. The parabolic SAR has also moved above the price indicating the likelihood of a negative trend.

It is not inconceivable that price could move down as low as $ 1310.

Is gold telling us something about the FOMC meeting?

The US Federal Open Market Committee will meet today and tomorrow for its rate policy decision to be followed by a press conference by Fed supremo Janet Yellen on Wednesday – her first in the new position. The market expects a continuation of the “taper” of $ 10 billion out of the monthly bond purchase program, though some circles expect a further cut in purchases. The markets are also looking forward to any indication of a policy change in respect of interest rates.

Economic data out of the US has been trending better in the recent past, and a Bloomberg survey says it is likely the Fed will draw courage to trim the bond program further. The drop in stimulus could further impact gold bearishly.

Waiting for short signal at WTI Crude oil swing level

November 12, 2013 in Trading with Other Commodities

wti crude swing point short

Generally we stay clear of the crude oil markets, as they generally display high levels of volatility while whipping up and down but really getting no where. Every now and again the crude oil markets will develop into a trend, that’s when we focus our attention. When crude trends it generally produces very nice price movements.

Currently WTI crude is cruising back upwards after a downward bearish trend extension. We are just waiting for the market to find value back at the trend mean, which is currently located around a strong resistance level. If the market drops a nice strong bearish price action signal here, we can make a fair call that the trend is intact and the downward momentum is going to continue.

Gold Technical Update – WC 7th January

January 6, 2013 in Trading with Other Commodities

Gold Technical Update – WC 7th January

Gold (XAUUSD) plummeted lower and ultimately moved below the key $1630 per ounce level on Friday morning, this area marked the lowest level found since last August, and a drop of over 3% in just 24 hours.

This area held on the daily closing basis, with a subsequent rally to $1655 seen at the New York close.

See the following D1 Gold chart.

gold technical analysis

Gold technical analysis

Gold Technical Analysis – Dec 24th

December 26, 2012 in Trading with Other Commodities

Gold Technical Analysis – Dec 24th

Gold Technical Analysis

  • The price of gold has found support at a key level comprised of the following technical points of interest:  61.8% Fibonacci retrace, FE100 expansion from a potential ABC correction point and the previous resistance area around $1630 – as highlighted in our previous update.
  • The latest reversal came just above this tight confluence level as price hit an ascending trend line area, adding additional bullish weight from a technical analysis perspective.
  • Prior to this the price of gold was in a strong down trend recently; it remains to be seen whether the precious metal can hold above this support level going forward.  We will be monitoring the price action around this prior “support zone” to gain a directional bias going forward.

XAUUSD – – Daily Chart

gold technical analysis

Any news, opinion, analysis, price quote or any other information should be taken as general market commentary only and not as advice to trade on. Omissions and errors may occur.

Gold Update WC 12th November

November 11, 2012 in Trading with Other Commodities

Gold Update WC 12th November

Gold Technical Analysis – Gold finished the week close to the $1730 per oz mark on Friday, after scaling to highs around $1738.71, a two-week high for the precious metal. A risk aversion tone dominated throug the week with the SPX (S&P 500 index which is often seen as a barometer for risk) experiencing its worst weekly percentage basis drop since June. The S&P 500 printed a decline of 2.4% over the week.

gold chart november 12thBroad based dollar strength (see our latest dollar index update) has been found this past week, which would often signal a decline for gold. However, gold bullion has recorded the first weekly basis gain since early October, and increased in value by over 3%.

Inflows into Gold ETFs have come in at over 10.5 tonnes over the last three trading days alone. Interest in gold exchange-traded funds has picked up recently as the ultra-loose monetary policy from central banks, with an associated debasement of currencies, remains a key focus for the investing masses; as does the fiscal cliff and European debt crisis.

gold technical analysis
Any news, opinion, analysis, price quote or any other information should be taken as general market commentary only and not as advice to trade on. Omissions and errors may occur. Be safe.

Gold Update For 9th November

November 9, 2012 in Trading with Other Commodities

Gold Update For 9th November

  • Gold is trading higher as a risk aversion theme dominates market sentiment and the so-called U.S. “fiscal cliff” remains a key factor.  Gold is up around 3.5% on the weekly basis.
  • Gold stored in ETP (exchange-traded products) registered around 2,596.106 metric tons, as of yesterday, according to recent data from Bloomberg.
  • Price is now consolidating recent gains around the 50% retrace level.  $1800 remains as the key upside potential resistance level in the longer term
See our latest Gold Analysis update and the XAU/USD Daily Chart below.

gold analysis news forecast outlook 2012-11

Gold Price At Two-Month Low Following NFP

November 3, 2012 in Trading with Other Commodities

Gold Price At Two-Month Low Following NFP

Gold is at a two-month low as broad based dollar strength was seen on Friday, the precious metal broke through the $1700 level after a stronger than anticipated NFP (US Non Farm Payroll) report.  This was the fourth weekly loss in a row for gold.

Gold Technical Analysis studies can be seen in the XAUUSD chart below.  The following daily time frame gold chart show the key levels we will be monitoring heading into next week. The 61.8% Fibonacci retrace is of particular interest, as it is aligned with previous resistance which could potentially see support if hit.

Gold Daily Chart – XAUUSD

price of gold analysis


Gold Tech/Sentiment Update – 25/10/12

October 25, 2012 in Trading with Other Commodities

Gold Tech/Sentiment Update – 25/10/12

  • Gold has continued its recent downside after finding interim resistance near the nine-month highs.  Gold prices have dropped over 5% during the previous 2 weeks.
  • Recent low gold prices might prove to be attractive for potential new buyers.  India’s Diwali festival approaches with a possible increase in demand for the previous metal. 
  • From the technical perspective the $1700 per oz level and close 38.2% Fib ret might provide some kind of support.  It is also worth noting that the 61.8% level is aligned with previous resistance highs around $1630 should gold see a sustained drop in value.

Gold Analysis

Gold Technical Update 19th October 2012

October 21, 2012 in Trading with Other Commodities

Gold Technical Update 19th October 2012

Gold Analysis from Forex FX 4X 

  • The XAUUSD (spot gold) has traded into fresh one-month lows today as the market comes to terms with worse than expected earnings reports and the US dollar gained accordingly.  Commodities are being dragged lower with metals along with oil amongst the losers; oil closed at $90.09 and down $2.
  • When referencing the attached gold weekly chart we can see that the precious metal is heading for a second consecutive weekly basis fall.  This is the first time since this May that two weekly declines have been seen for the price of gold.
  • The technical resistance level around $1800 has proved to be too strong a hurdle for the gold bulls after the sustained upside move following the triangle breakout in July.   Profit taking at this level may be in part attributable to the recent downside move.  Gold could be in need of a fresh catalyst in order to break through the stubborn $1800 per oz level.
  • A close near the current level would see a weekly timeframe bearish engulfing candle form.  If this momentum continues into next week, and gives a confirmation move under this bearish engulfing candle, the downside pressure on XAUUSD may continue in the short term and open up a potential move to the $1700 area.
  • The $1800 handle continues to be a key resistance point on any move higher for gold.
Gold Weekly Timeframe Chart
gold analysis news 19th october 2012