Gold swing trades – w/o April 4, 2016

Last week



GOLD bounced between the 20- and 40-day moving average lines last week and tried (successfully) to hold the price above the psychological support at $1200. Fed Chair Mrs. Yellen’s dovish comment last Wednesday encouraged investors to take profits from the three-month rally from mid-December.

Last week’s trades

160401-Gold-60A decent week for traders, even though the weekly price range was relatively small, about $40, and the weekly price change was only $2.

There were two fair-sized moves, one up, one retracement, that offered reasonable trades.

For the first, the price made a low just $1.50 above Nat’s first buy level, but the low was made in the small hours Sunday.

If you placed a resting order Saturday when Nat’s gold outlook was posted you had a reasonable chance of catching it. Otherwise you had to look for an entry point around the support level at $1217 established during the day session Monday.

That led to a $23 move up to Nat’s key line, where the move stalled and reversed/

The second trade was a breakdown from the Pivot level at $1231, which moved back to (and below) Monday’s support at $1217. We didn’t catch all of that move, but we got most of it.

Together those two transactions provided about $3,600 profit – per contract – for traders who caught them both.

Note that many of these good trading opportunities are beginning outside of the regular trading session, especially after the European markets open in the early morning (New York time). To catch them without waiting for the small hours of the morning, many of Nat’s traders are using resting orders placed earlier in the evening.

This week

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160401-Gold-dailyNonfarm payrolls rose 215K in March, above expectation of 200K. The unemployment rate ticked higher to 5% from 4.9% in February.

This diminishes the possibility of a rate hike in April. Investors are more likely to choose riskier assets for short-term investments: more stocks, less gold.

$1200 is a psychological support. Last week GOLD managed to hold above it. This week this level will remain as first support. As long as this support holds, a sideways move inside last week’s range is possible.

A failure to hold up the price could lead GOLD to drop down to $1180-1170 to test the February breakout level, which was also last October’s high area.

$1265-1262 zone will be a major resistance zone for the short-term. $1235-37 is a key zone for this week. Staying under this key zone will give a slightly bearish outlook for the trading. Odds will likely favor the selling side.

PMO indicator still moves down on the daily chart. It indicates that the current correction hasn’t completed yet. A further decline should still be expected.


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