Gold swing trades – week of Oct. 5, 2015

Last week

Gold future to Oct. 2, 2015

Gold futures prices to Oct. 2, 2015

Gold surged on weak jobs data Friday and erased the four-day loss from earlier in the week. The early decline was largely due to confusion about the Fed’s plans for a possible rate hike in October.

But on Friday both the Non-farm Payroll and the Factory Orders were bad, and failed to support tighter monetary policy. Fed comments in the financial press about further easing convinced traders a rate increase is not imminent.

The price movement provided excellent trading opportunities for our members. The price broke below the pivot early Monday, and marched steadily down until Friday morning. Traders who climbed on that trade when the pivot was broken made about $20 per contract if they exited at Nat’s 1st buy level, or $35 per contract if they stayed aboard until the 2nd buy price was hit.

Following the bad Non-Farm payrolls the price immediately jumped. But traders who had orders resting at Nat’s 2nd buy level or at the 2nd support level were already in the trade when the market gained $30 in 60 minutes early Friday morning.

The profit for the week was somewhere between $5,000 and $6,500 per contract, one of the best results for the year. The swing calls seemed almost too good to be true… but you can see the actual trading plan in last week’s gold post.

Here’s the annotated chart showing how it all went down. 60-minute bars

Gold future, 60-minute chart

Gold futures, 60-minute chart

This week

FOMC minutes will be released on Thursday. All eyes will focus on whether Fed members will support a hike rate at the end of October or not. If not, the gold price will continue moving up.

Member content

Download the full trading plan here: 151005-gold

Gold futures weekly chart

Gold futures weekly chart

Based on the weekly chart, the sub-wave 4 of last primary wave 5 still is going on. As long as GOLD price doesn’t go under 1095.50 level, the C top still should be expected for next upside target area.

The 1148.50-1146.70 zone will be a key zone for this week. A move above it will be bullish. A further rally up to 1162.50-1156 or higher up to 1173.00-1176.50 zone should be expected to form the C top.

We may see a pullback later if the Fed does decide to raise the interest rate, but we doubt that will happen. Therefore, traders should continue to focus on the buying side if there is a pullback move in the coming days or weeks. All the short-term and long term support zones below the current price are expected to hold the price up.

Support levels

LONG-TERM SUPPORT at 1007.7-1033.90 – Yearly breakout level from Year 2008- 2009
LONG TERM Trend line SUPPORT at 1009.50 this week.
INTERMEDIATE TERM SUPPORT at 1045-1035 zone
SHORT-TERM SUPPORT at 1072-1095 zone.