Gold swing trades – week of Sept. 5, 2016

Last week

160902-gold prices

Gold futures prices, week ending Sept. 2, 2016

GOLD spent three days retesting its May 2 breakout level at $1306, and managed to hold above that level until the US Non-Farm Payroll report in Friday’s pre-market.

The NFP report was disappointing – 151k new jobs in August, compared with 185k expected – and it reduced the possibility of a Fed interest rate increase in September.

Higher interest rates usually means lower prices for gold. Reducing the likelihood of a rate increase made traders look more favorably at gold and the price moved up and closed up with a tiny gain for the week.

Last week’s trades

160902-gold 60a

Gold futures, Sept. 2, 2016. 60-minute bars.

Traders tend to sit and fret when they have a live trade on, but last week Nat’s gold traders could have gone on vacation and still been profitable.

The market moved back and forth across her key line ($1321) in the early part of the week, while traders waited for the Non-Farm Payrolls report on Friday.

But as the week wore on the price fell to Nat’s first buy level ($1307) and provided three good opportunities to enter at that level, the last one on Friday morning just before the report was released and the price spiked..

The subsequent move to the Pivot level was worth about $2,500 per contract. You could have placed that trade Wednesday with a market-on-close exit and still capture most of the profit. A set-it-and-forget-it trade.

Incidentally, these trades a re posted a full week in advance. You can see last week’s gold trading plan here.

This week

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This section contains the specific buy/sell levels or this week. It is reserved for paid subscribers. Past posts are available free of charge.

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160902-gold daily

Gold futures, Sept, 2, 2016. Daily chart.

GOLD rebounded Friday after a somewhat disappointing employment report for August. The reduced prospects for an interest rate hike in September helped GOLD to hold above the bottom of a three-month consolidation channel. Now the short-term has an oversold condition. It may lead GOLD to have a short-term bounce.

The first thing to consider is the $1335-30 zone which will be this week’s major key zone. If the price fails to move above this zone, GOLD is still vulnerable to a downside move because of the long-term overbought condition.

$1300-05 is a psychological support zone. As long as this support zone holds GOLD up, the odds will favor a move up to challenge the weekly key zone. If that continues and there is a break above $1340 the outlook will be bullish. Conversely, a break below $1297-95 could push the price down towards the first long-term major support area at $1277-$1260.

The daily PMO indicator is in a neutral area, not oversold yet. But it has an early sign for turning up. Price tested the low of the three-month consolidation channel and held up. We shouldn’t ignore that there is a possibility for GOLD to move back up to the top of channel. This week traders could make money on both sides, but proper stops are definitely needed


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