Gold swing trades – week of July 11, 2017

Last week

160708-gold prices

Weekly gold futures to July 8. 2016

GOLD rallied to the upper boundary of the long-term downtrend channel last Thursday and made a small ultra-short-term retracement on Friday after a strong jobs report. That’s about what we predicted in last week’s gold newsletter.

The retracement doesn’t eliminate the possibility of a move higher, as we discussed last week.

Last week’s trades

160708-gold 60a

Gold futures July 8, 2016. 60-minute bars.

Concerns about British withdrawal from the European Union continued to puch gold markets higher, despite what looked like determined efforts to hold the price down, especially in the pre-market Friday morning..

The futures spent the entire week well above Nat’s key zone ($1310) and above the pivot ($1331).

That left traders with no clear-cut entry on the long side. On the short side. the price stayed above Nat’s 1st sell level and around the first resistance levels most of the week.

Traders who took that trade — and had the patience to hold it to the end of the week — had the opportunity to make somewhere between $35 and $30 (worth $3,000 and $3,500) per contract for the full move.

However relatively few traders would get the full move. A more likely trade was an entry at the sell level and an exit around $1350, with a potential gain of about $1,500 per contract.

This week

This week has a full roster of speeches from Fed members, with one or more speaking at different times every day. The good job report last week raises the possibility of Fed rate increase this year and that will certainly be mentioned many times this week.

We still think a Fed rate increase before the November election is unlikely. But the incessant jawboning from the Fed may trigger a short-term correction for GOLD prices this week.

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160708-gold weekly

Gold futures July 8, 2016. Weekly chart.

For the intermediate-term, the uptrend should remain intact. As long as Gold stays above the $1300-$1280 zone, it will not change its direction. However an ultra-short-term overbought condition could prevent the price from advancing at the current stage.

A further decline to retest the $1305-15 zone is certainly possible, especially if gold fails to move above $1378-80 but instead breaks below the key control zone ($1333-36.50). But if it occurs, that decline will not signal a change in direction.


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