Economic Events
| January 16 | Holiday | United States – Martin Luther King, Jr. Day | |||||
| Jan 17 | |||||||
| 13:30 | United StatesNY Empire State Manufacturing Index (Jan) | 10.90 | 9.53 | 1 | |||
| Jan 18 | |||||||
| 13:30 | United StatesProducer Price Index (MoM) (Dec) | 0.2% | 0.3% | 1 | |||
| 13:30 | United StatesProducer Price Index (YoY) (Dec) | 5.7% | 2 | ||||
| 13:30 | United StatesProducer Price Index ex Food & Energy (MoM) (Dec) | 0.1% | 0.1% | 1 | |||
| 13:30 | United StatesProducer Price Index ex Food & Energy (YoY) (Dec) | 2.9% | 2 | ||||
| 14:15 | United StatesCapacity Utilization (Dec) | 78.3% | 77.8% | 1 | |||
| 14:15 | United StatesIndustrial Production (MoM) (Dec) | 0.5% | -0.2% | 2 | |||
| Jan 19 | |||||||
| 13:30 | United StatesBuilding Permits (MoM) (Dec) | 0.680M | 0.681M | 1 | |||
| 13:30 | United StatesContinuing Jobless Claims (Jan 7) | 3.628M | 1 | ||||
| 13:30 | United StatesHousing Starts (MoM) (Dec) | 0.685M | 2 | ||||
| 13:30 | United StatesInitial Jobless Claims (Jan 14) | 392K | 399K | 1 | |||
| 15:00 | United StatesPhiladelphia Fed Manufacturing Survey (Jan) | ||||||
Historical
High: 1916.20
Low: 1321.10
Level 1 Level 2 Level 3
Resistance 1697.2 1664.1 1659.0
Support 1628.2 1609.3 1593.4
Rule:
One of the simplest ways for traders or investors to take part of this intense gold up trend is to let price action be their guide. In taking a look at the daily chart of gold, we can see numerous price action strategies that occurred in the context of this trending market that nearly all worked out as great entry points. Notice in this chart below how accurate price action can be and the frequency with which it provides high probability entry signals. By no means are we suggesting traders should have or could have taken all of these entries. But when you combine such high probability entry strategies with a sound money management plan, including a profit taking strategy, it would be very hard too not profit consistently in strongly trending markets like we are currently seeing in gold.
Gold is a bull force to be reckoned with right now, when a market is in a strong trend there will naturally be many great entry points. Price action setups can provide a plethora of accurate and non-lagging entries into such trends.
o Human discretion plays a big role in trading success, despite what internet marketers want you to believe, rigid trading “robot” and lagging indicator systems will never make you a consistently profitable trader. You need to get an education in price dynamics and “naked” price chart reading to develop your discretionary trading skills.
o There is simply no need to cloud up your charts with lagging indicators when mastering a few simple price action setups is much more accurate, effective, efficient, and stress free.
o When fundamental AND technical forces are in alignment, as with the current situation in gold, price action traders have an extremely valuable opportunity because trading with price action allows for much more accurate entries than other methods as well as providing traders with a “set and forget” style of trading when used in combination with simple risk to reward scenarios.
Gold prices always rise when there is uncertainty in the global economy. In times of uncertainty, wealthy investors tend to run towards gold. Suppose, rumors are flying high about some event in the world and this is increasing the uncertainty in the financial markets. Gold prices are on the rise again. You now buy three gold contracts. By the end of the week, each contract is up by 100 points. You make a cool $3,000 when you sell the three contracts. This way, you complete your third trade in a series of four trades.
This completes the third trade in the series of four trades. Now, you are ready for the fourth trade. You watch the market. It is moving up again. You enter with four contracts this time. You wait for a few days and the market is up by 50 points. You sell all the four contracts and make a profit of $2,000. Your total profit in this series of four trades is $6,500. This profit you made in just a matter of few weeks which is not bad. After you complete a series of four trades, you remove the profit from your account. Now, you can start all over again with a new series of four trades. The first trade in this series of four trades will always be with one contract.
This is a very simple gold trading strategy that depends on pyramiding your position with a series of four trades and removing all the profit from your account at the end of these four trades. With practice, you will find this gold trading strategy very simple and easy to implement.
- Gold reacts to uncertainity in the markets
- A drop in major currencies can indicate a run into gold.
- Remember investors tend to take profit from gold so watch for trading opportunties when investors are taking profits, not moving out of the markets.
Analysis and Recommendations:
The US Dollar remains the leading pace-setter of gold price action, acting as a transmission mechanism for overall sentiment trends. With that in mind, the return of risk aversion telegraphed in S&P 500 index futures’ positioning points to recovering safe-haven demand for the benchmark currency, amounting to de-facto downward pressure on gold prices. As with crude oil however, there may be scope for a supportive Beige Book release to counterbalance bearish momentum (at least to some extent).
European debt will be the focus again this week, but with a change, now that S&P has officially issued their downgrades, there remain many questions of the overall effect of the downgrade and how it will attach to the bond situation, especially the new ECB bond rating. We should currencies continue to fall and investors might just push gold up looking for a safe-haven to park money.
Enter the markets cautiously, but, gold will most likely move upwards at the opening on Monday, eventhough US markets are closed for a holiday.
Originally posted here
