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Gold Trade Update 2013-01-04

This is an update on the gold trade I entered on Dec 28, 2012. It is now midnight the morning of Jan 4, after the chaos of the FOMC announcement seems to have settled. At least, for now. Tomorrow may bring more heavy swings in gold, and the USDX.

I am still long on my gold trade, I have not exited my position. I had seen, at one point, a 40 point profit, but that wasn't exactly what I was aiming for. I don't want to get distracted with interim ups and downs for this trade. I am really looking for a buy and hold for a longer term upward dynamic with this trade. 

Prices are hovering right around my entry price at this time, but I am willing to hang tough even if prices drop another several dozen points. I build a plan for this trade, and as of yet I see absolutely no reason to exit my position. My goal, at this time, is to remain positioned the way I am. My projected time frame for this trade is in months. This is the reason I bought using December 2013 futures, rather than the February front month.

Observe the following daily chart for the Feb contract for gold futures.

daily gold price chart

Although MACD is down for the Jan 4 trading date at current prices, I still see positive price and indicator behavior here. If prices take an additional significant drop during tomorrow's day session, I may reconsider. 

However, it would have to be a very significant drop, and it would have to close down. 

I can quite easily see myself holding this gold trade should prices drop below the recent lows. Again, I am looking for longer term gains here, and my priority is maintaining positioning regardless of near-term volatility.

One factor that could change my perspective are the COT results that come out tomorrow, although I doubt very much that such will be the case. 

The FOMC statements made today certainly created a lot of hype and movement in the gold market and the USDX market. What I read from the statement was that they continue to plan unlimited QE on a monthly basis throughout 2013. Although there was some talk about maybe discussing the possibility of discontinuing QE before 2013 is up, I find it unlikely an end to QE will occur.

They seem to be committed to "stimulating" about 85 billion dollars a month, for all of 2013. That totals over 1 trillion dollars for the year. This seems like over the course of months, it will be generally bullish for gold. I see the market behavior today as being a very good "shakeout" for weak holders. By shaking out shaky holders, more money is being freed up to buy into gold later on, assuming prices do rally longer term as I expect.

I am still open to the possibility that I have made a mistake, and I will exit my position I feel its appropriate. I do not feel so yet.

If this was an advisory service, I'd probably say something like "buy gold now". Value seems to be upon us.

In Other Markets

I am still long natural gas from a long trade I entered the mid-morning of Jan 3rd. I am still looking for a long entry into sugar. I am watching the USDX.

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Futures Trading Blog Posts

posts listed chronologically below



2013-04-08 Short Natural Gas

2013-03-10 Dollar Index

2013-02-17 Crude Oil

2013-02-11 British Pound

2013-02-03 Gold & Updates

2013-01-21 Gold Trade

2013-01-14 Natural Gas

2013-01-14 Gold Update

2013-01-07 Sugar Trade

2013-01-04 Gold Update

2013-01-03 Natural Gas

2012-12-28 Gold Prices

2012-12-26 Natural Gas

2012-12-24 Updates

2012-12-12 Sugar Trade

2012-12-06 Dog Video

2012-12-06 Gold Re-entry

2012-12-05 Natural Gas Update

2012-12-04 Natural Gas

2012-11-29 Gold

2012-11-19 Updates

2012-11-06 Natural Gas

2012-11-01 Natural Gas

2012-10-28 Gold Futures

2012-10-23 Natural Gas

2012-10-22 Sugar, Re-entry

2012-10-18 Sugar

2012-10-17 USDX, Sugar, Gas

2012-10-15 Natural Gas Futures

2012-10-12 Natural Gas Update

2012-10-10 Natural Gas

2012-10-04 Sugar Exit

2012-10-01 Sugar Update

2012-09-25 Natural Gas, Sugar update

2012-09-20 Sugar

2012-09-20 Natural Gas

2012-09-12 Canadian Dollar

2012-09-11 USDX

2012-09-10 Natural Gas

2012-09-09 Natural Gas, DX, GC, SB

2012-09-05 Sugar Futures

2012-09-04 Canadian Dollar

2012-09-01 Gold, Dollar Index

2012-08-24 USDX, Sugar, Gold

2012-08-19 TRADE Sugar

2012-08-16 TRADE Sugar

2012-08-12 10yr T-Notes

2012-07-30 TRADE: AUD/USD

2012-07-23 TRADE: USDX

2012-07-18 TRADE: US Dollar Index

2012-07-17 TRADE: AUD/USD

2012-07-15 10 Year Treasuries

2012-07-06 Sugar Futures

2012-07-02 TRADE: Australian Dollar Futures

2012-06-27 TRADE: Sugar Futures

2012-06-25 TRADE: US Dollar

2012-06-22 TRADE: US Dollar

2012-06-21 TRADE: Gold, Sugar

2012-06-18 More on Gold

2012-06-12 Gold Update

2012-06-12 TRADE: Dollar Index

2012-06-11 TRADE: US Dollar

2012-06-07 TRADE: Gold

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