Gold swing trades, week of May 2, 2016

Last week

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Gold futures, week ending April 29, 2016

GOLD surged to new 15-month highs after the Fed left interest rates unchanged and the BOJ decided against any further accommodation — at least for now. At Friday’s close the price of gold was up 5% for the month, and more than 21% year-to-date.

Last week’s trades

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Gold future, Apr. 29, 2016. 60-minute bars.

A great move last week. but tricky to trade. Both the entry and the exit(s) were not very clear-cut, and it was easy to get on the wrong foot.

The market started the week in a relatively narrow range vacillating around the pivot ($1244) as traders held their fire, waiting for the  Fed Open Market Committee announcement Wednesday afternoon.

When the announcement was released the volume spiked, but the price retraced below the pivot again for the day session, a fake breakdown that induced some traders to get short.

Bad decision. Overnight the futures broke out and carried up for two days to reach $1300. On the way gold pushed through all of Nat’s price targets. Traders who entered at the pivot and stayed on board for the second resistance level gained $45 per contract, or about $4,500.

But the temptation to get out earlier was pretty strong, and most traders probably got off the train before the final destination. A nice profitable week, but the trades were not obvious.

This week

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