Trade of the week: long gold
We'd like to use the recent 8% drop in the gold price to enter the long-term trend by going long at $2,594.00 with a stop loss below the $2,470.00 late August low and an upside target of between $2,700.00-to-$2,800.00 and above.
(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 67.00. And we cash in our profits here.
And then last week we decided to go long USD/JPY. And you can see here that that trade also worked out fine. We went long here at ¥150.37. If you haven't cashed in your profits yet, around ¥156.40 or so, you can move your stop loss level to your break even level, meaning to your entry level, whereby if the market were to point down again, we would not be stopped up with a loss. We would just be flat on this trade. So that one, you can still let run. The upside target still around the ¥160.00 area. So that one is, is still there.
This week's trading opportunity
Which brings me to this week's "Trade of the week". And the gold price, as you can see, has come off by 8% over the last 2 or 3 weeks and is now starting to point up again. And it looks to me as if we could at least short-term see a bounce back towards the long-term uptrend line which has been broken through, which might now, in the future, act as resistance.
But, I believe that perhaps we can also just stabilise in this area and perhaps sideways trade. So from that point of view, from a technical perspective, we might also see here an ABC correction. And therefore we could reintegrate the previous uptrend, which is why I would like to go long here.
This week's "Trade of the week" is to go long gold and do so on current levels with a stop loss below the late August low, around $2,470.00 and an upside target probably around $2,800.00 even higher up, but perhaps also $2,700.00 in the meantime.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
React to volatility on commodity markets
Trade commodity futures, as well as 27 commodity markets with no fixed expiries.1
- Wide range of popular and niche metals, energies and softs
- Spreads from 0.3 pts on Spot Gold, 2 pts on Spot Silver and 2.8 pts on Oil
- View continuous charting, backdated for up to five years
1In the case of all DFBs, there is a fixed expiry at some point in the future.
See opportunity on a commodity?
Try a risk-free trade in your demo account, and see whether you’re onto something.
- Log in to your demo
- Try a risk-free trade
- See whether your hunch pays off
See opportunity on a commodity?
Don’t miss your chance. Upgrade to a live account to take advantage.
- Analyse and deal seamlessly on fast, intuitive charts
- Get spreads from just 0.3 points on Spot Gold
- See and react to breaking news in-platform
See opportunity on a commodity?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
- Equities
- Indices
- Forex
- Commodities
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
