Gold has rallied up to a level that is an old trading range from last year from February to June.
In summer, Gold jumped out of that range and moved up another 10% before sliding back down into year end.
Market's remember old price levels and those folks who entered the gold market last year didn't really have a chance to get out of their positions. The signal for them to get out was the fact that gold slipped 10% down to $1130, which is far beyond the price where there were buyers last year around the $1240-$1260 level.
I labeled the decline into year-end 2016 as "psychologically tortuous", which I think is why we are having a decent bounce from that oversold extreme.
An active strategy from here is to "trade the chop". Sell calls going out to May using the $1250 strike to capture option premium. If you want to get long, sell puts with a $1200 strike and capture all of that premium instead of buying outright.
Either way - it will take awhile to get through this price level. Sharp shake-outs are possible, but be brave and buy into those breaks when the 30 minute chart fails to follow through after 3 bars.
Cheers,
Tim
Jan 23, 2017 9:41AM EST
Bình luận
⋅
I think this is about the low-end of the setback after rallying into that "heavy overhead supply". Sellers will likely back away from selling down here, but will return when we get back up to prices seen at least week's high.
If you sold calls, cover those calls here. If you have no positions, this is a great place to buy with a close stop (1 average range, $15) and target a $20 rally. I think the odds are 60%-75% that we will see a rally of $20 before a decline of $15 from here. In the long run, those are good odds.
Tim 9:14AM Thursday, Jan 26 Gold 1190.70 (GCJ2017) -9.80
Bình luận
⋅
"Spot on" so far. Massive overhead supply is a major factor preventing Gold from moving higher. I think we also saw some head-scratching when Bitcoin got ahead of Gold this past week. But outside of the normal reasons why people buy gold, when VIX is rising for example or when nerves are high about the health of financial system or concerns about some violent upheaval, it is actually encouraging to see gold fall because it should mean that stability is returning. 3/9/2017 11:16PM EST 1198.11 last XAUUSD
Bình luận
⋅
If you hit the "UPDATE" button on the chart you can see that the market has indeed been under the "CLOUD" of supply overhanging the market in the form of "old buyers" liquidating their old, losing positions.
It takes time to chew through supply as big as this, so look for Gold to follow bitcoin and surge higher over the remainder of the year. The world always needs a safe-haven asset class and gold is still one of the best to keep an eye on and utilize for hedging against central bank endless liquidity. If you don't marry your positions (trade in and out), you can capture 10%-15% return per year in gold on 10%-20% of your portfolio and get a 1%-3% portfolio return while experiencing reduced volatility.
April 27, 2017 8:09PM EST
Bình luận
⋅
Right on top of the forecast now.... sideways for 4 months panned out. Hope you did well over this time period. 5/7/2017 1230 last 9:47PM EST
Bình luận
A-shot
⋅
Still there!
A-shot
⋅
Thanks for the updates! Always nice to see it panning out like that!
HamedAghajani
⋅
Great update tim
A-shot
⋅
If you marry them, do you add to the position when it does corrections like this?
HamedAghajani
⋅
@2use, it is hard to cope with two mother in laws. For me at least to be fare
coolingla
⋅
Great chart!
Here is my guess:
kenny1924
⋅
I see the point about the overhead supply but generally speaking Trump will decide the fate of Gold by moving the USD up or down. Sure supply and demand does move gold, but the weighting factor in my mind (and I might be losing my mind) tells me that USD movement trumps the S/Demand variable.
For example, if USD goes to 80, which it will not, gold will be at $1800 and yes, it is not going that far either. Just making a point. Lets see.
I am long gold for a long time so I am not worried about the small movements, and if Trump really follows thru on many factors, then and only then I will sell Gold but that will be in 2018-19-20.
timwest
⋅
@kenny1924, So far, so good. Gold tried to push through supply but was turned back. There isn't much supply down at these levels, so look for another attempt at pushing through those supply levels just overhead. In other words, buy the bottom of the range and exit in the upper part of the range against supply. 3/13/2017
IvanLabrie
⋅
Looks good to take the long indeed Tim.
A-shot
⋅
I wonder how this will play out for the markets, as sideways is a best-worst period, depends how you play it :)