Archive for the ‘Gold Futures Trading’ Category

Technical analysts are looking for the gold futures market to soon rebound to the $1,500 per ounce area after making a “double-bottom” popular charting formation yesterday.  Gold futures have been trending decisively lower since October.

A double bottom is used by analysts to predict a possible low-price of support followed by a retracement higher, and finally a second low that meets, or attempts to meet, the previous low.  Gold futures reached a two-year low in mid-April at the $1,320 area, followed by a rebound to $1,487 at the beginning of this month, and finally a second low yesterday at the $1,336 area.
            
“While the technical’s do show a double bottom formation on the (gold futures) chart, the fundamentals cannot be ignored,” said Kevin Craney, a senior commodities broker at RJO Futures in Chicago, in a recent e-mail exchange, regarding the current gold futures situation.  Craney added, “Chairman Bernanke will speak tomorrow and the gold (futures) market will be listening.”

The trend for gold futures is down, but this bottoming formation may be eluding to a possible change in trend back upward.  The weekly chart analysis for gold futures (in my study) is forewarning of a possible change in trend too.

The recent drop in gold (futures) is said to have divided central banks perception and debate whether it is of low enough value to increase investment.  The gold futures plunge these last three trading sessions is unlike anything seen in the gold market for the last 30-years.

Central banks in Australia, Korea, South Africa & Sri Lanka have all made public statements regarding the recent gold (futures) drop in price, but not all are agreeing that this is an opportunity.  Central banks are said to own almost 20% of all the world’s gold ever mined, and many have boosted their holdings the most in the last 50 years.

Gold futures steep drop has changed the daily trend from up to down.  I felt the need to exit gold futures in my trading yesterday after a $196 per ounce price change in gold profit.  I realized if/when bounce in price occurs, it can go right through our protective stop at night while “sleeping.”  Even the electronic markets kick-out orders when the markets jump through prices – something I don’t wish to risk…

Here comes talk of the next wave higher for gold futures.  Just today, a London-based precious metals trader for Deutsche Bank publicly stated his opinion of gold futures rallying to an extended record of above $2,000 per ounce into next year.  He believes centrals banks will continue to pump cash into stimulus to sustain a recovery.

Currencies are expected to be negatively affected by Europe’s debt crisis, and inflation is expected to soar, so governments and central banks are taking necessary steps buy obtaining gold bullion assets to thwart any fallout.  Actual gold bullion is on its 12th annual gain this year, and just last week holdings in gold-backed ETF’s became the largest ever.

“Fear of a weaker dollar has traders looking to the gold market for a potential safe haven for investment.  Adding credence to the bullish side of the market is continued strong demand out of China and India for the (precious) metal,” said Barb Levy, chief director for Futures & Options Xecution’s futures division in Chicago, regarding the current gold futures situation.

Gold futures have been in a down-trend since mid-October, but has found strength at lower prices since.  I am looking for signs of a trend reversal to go long gold futures for the next leg up.

Gold futures is seeing a bounce today – possibly the biggest gain since the highs made on October 4th.  It was reported both Brazil & Turkey’s central banks are adding to their gold inventories, and there are signs India (the world’s biggest buyer of gold) is even buying more of the precious metal.

Data on the IMF’s website has indicated the Brazilian gov’t has added to their gold reserves for the first time in almost four years, as well as Turkey increasing their holdings.  Just yesterday, gold futures dipped below $1,700 for the first time since early last month, which might have been a psychological level for buying.

Christian Moreno, a commodities broker for HighGround Trading Group in Chicago, stated today regarding the current gold futures situation, “Countries are printing money at record pace, governments are securing large amounts of gold, investors can no longer rely on fiat currency.  In my opinion, this all points to higher prices in gold (futures).”

Gold futures is in a well defined down trend at this time.  I am only interested in the “long side” of gold futures as long as the global gov’t debt crisis still exists.

A recent survey – from the folks at Bloomberg – suggests gold (futures) are poised to climb another leg higher on the outlook another fed-stimulus here and in China adds to demand and provides an inflation hedge.  Gold futures ended the day lower most likely by profit taking.

The survey also included a prediction for gold (futures) to reach $1,800 per ounce by the end of the year.  This is a much more reasonable outlook than the $2,000/$2,500 & even $5,000 per ounce predictions we have heard in the not-so-recent past.

“The problems in the Euro Zone have not gone away even though things have been quiet for the last two weeks,” stated Chris Hildebrand, vice-president of trading at HighGround Trading Group in Chicago, regarding the current gold futures situation.

Gold futures are in a newfound technical uptrend with this last leg up.  I am looking for a pull-back to get get aboard the long side.

As central banks worldwide bought gold to increase their nation’s bullion holding, gold futures saw a spike higher for the first time this week.  By the closing bell, however, any early gold futures gains was negated.

IMF data shows central banks in Europe, Central America, and the Middle East all increasing their gold holdings, and Turkey itself boosted its gold reserves by almost 30 metric tons alone!.

“Gold (futures) turned higher for the first time this week after suffering heavy losses in the past few sessions. Turkey, Ukraine and Mexico were shown to be increasing their gold reserves,” said Barb Levy, chief director of Futures & Options Xecution’s Futures Division in Chicago, regarding the current gold futures situation.

Gold futures trends remain down and I think we may have been stopped out prematurely.  I am looking to get back short gold futures on a minor bounce higher (for Friday’s session).

Gold futures continue to trade lower as the US Dollar finds strength with the support of the Federal Reserve.  The February Gold futures contract is on track to test the September low as gold bugs are falling out of love of their precious metal as a “hard asset” investment.

Currently the Euro-currency has fallen to lows not seen since the beginning of the year against the US Dollar because of concern’s Euro-leaders won’t come to an agreement how to solve the Continent’s fiscal problems. The counties in trouble seem to find creative ways to fund their deficits, but time is running out.

Kevin Craney, a senior commodities broker with RJO Futures, stated today by e-mail regarding the current gold futures situation, “The cautionary statements from the FOMC today will continue to support the dollar and put downward pressure on gold (futures). With continued uncertainty coming from Europe gold (futures) will trade a risk asset.” Craney added, “In the current environment risky assets are being sold.”

Gold futures today have technically changed trend from up to “down.”  I have a problem selling short gold futures amid the financial troubles of our globe, so I will look for areas of support for buying opportunities.

Evidentially Europe’s debt crisis is perceived as deepening, and investors there are increasing the demand for gold as a form of wealth protection.  Gold futures rose today in it’s fourth straight session – the longest duration rally in three weeks.

The focus is on Greece, once again, and the restructuring of it’s debt.  One of Europe’s central banking figures actually was quoted as referring to the Greek financial crisis as a “horror story.”

James Lombardo, a trading advisor and broker with R.J. O’Brien Futures in Chicago, said today, “…Greece, it’s a mess and European policy officials are at odds on how to contain the crisis.”  Lombardo added, “When debt issues arise over countries and regions, investors (prefer) flocking to gold.”

Gold futures are up for the year just over 25%, and the trend barely remains up at this time.  The current volatility of gold futures, and the profit-taking after these short rallies still continue to be a challenge for short-term trading.

Gold futures continue to test its highs on the combined outlook costlier raw-materials and low-inflation rates are just the right recipe for inflation, and owning the precious metal is the right move as an inflation hedge.  Gold futures closed just under Monday high of $1,478 per ounce.

Today the Department of Labor announced domestic wholesale costs up .7% last month with energy costs leading the way.  The significance is wholesale prices are up almost 6% from this time last year, whilst gold futures are up a whopping 27% compared to this time last year.

Jordan Luckey, commodity trading broker at R.J. O’Brien in Chicago weighed in by stating today, “Inflationary pressures continue to weigh on the markets.  Today’s PPI number showed a modest increase in core inflation with an unexpected increase in jobless claims, which drove gold (futures) prices higher.  With the ongoing inflation concerns and QE2 coming to an end in June, gold (futures) has pushed near its all-time highs and will likely continue to newer and higher highs.”

Although the trend for gold futures remains up, the volatility in this market prevents me from recommending the “lower-risk” trades that I have normally been accustom to.  I will continue watch both precious metals market for the best opportunities.

Just as the turmoil in North Africa, Japan, and Europe continued today, gold futures set another record high as investors seek alternative investments.  Gold futures are rapidly approaching $1,500 per ounce at the New York Commodity Exchange.

The Japanese stock market took another tumble, Moody’s credit rating service lowered the rating of over a couple of dozen Spanish banks – plus Portugal’s PM offering to resign, and the Libyan “altercation” all have helped boost gold futures today. 

“Gold (futures) was very volatile today…It appears as if this was end of the quarter profit taking from a nice run-up we have had in the last week,” said Jordan Luckey of R.J. O’Brien Futures Group in Chicago from an e-mail interview today. Luckey went on to say, “Geopolitical issues and a falling dollar should continue to be supportive of gold (futures) on its long-term uptrend.”

The trend is clearly up for gold futures with absolutely no market “top” yet in sight.  Gold futures is not “climbing a wall,” however – it’s making new highs in choppy market conditions.  Trade with protective stops always!