Trade of the week: long gold
Explore this week's strategic trade opportunity by going long on gold. With a potential bounce in prices, set your positions for an upside target of $28, amidst shifting market dynamics.
(Partial video transcript)
Previous trading outcomes
Hello and welcome to this week's "Trade of the week" on Monday, the 18th of November 2024. Over a month ago, we went short New York cotton front month futures contracts. And, basically you can see here we did so at 72.69 and had to wait for a long time with the cotton price going against us. But because we had our stops above the previous highs, we didn't get stopped out. And now finally, we've hit our downside target, or nearly our downside target here, which was at 68.50. So we can cash in our profits on this trade now because we're very close to our target.
And then, what we also did is that, we went short at the beginning of November WTI, so Brent crude oil futures. You can see here we did so around 71.50. And since then we've come off nicely and hit our downside target as well. So we can get out of this trade now at 67. And we cash in our profits here.
Last week, we decided to go long on USD/JPY. This trade also performed well, where we entered at ¥150.37. If you haven’t yet taken your profits at around ¥156.40, you can move your stop loss to your break-even level (your entry level). This means if the market reverses, you would not incur a loss but just break even on this trade. You can let this one continue to run, as the upside target remains around the ¥160 area.
This week's trading opportunity
This brings me to this week's "Trade of the Week". The gold price has declined by 8% over the last two to three weeks and is now starting to rise again. It appears that we might see, at least in the short term, a bounce back towards the long-term uptrend line, which has been broken and may now act as resistance.
However, I believe that we might also see stabilisation in this area, possibly resulting in sideways trading. From a technical perspective, this could form an ABC correction and potentially reintegrate the previous uptrend. This is why I would like to go long on gold at current levels, with a stop loss below the late August low, around $2470, and an upside target possibly around $2800, with an interim target perhaps at $2700.
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