In the past week, we are seeing gold prices on the march again. So strong were the closing prices on Friday, July 12, that gold prices basis. The Comex gold futures are pressing on, challenging the all time high of $2,454.20 per ounce, which was last traded on May 20. The catalyst this time is, of course, the cooler than expected CPI numbers for the month of June. At 3%. It is the lowest in term of the headline inflation that we have ever seen in the States since the start of the war in Ukraine in 2022. Expectations are rising right now from one cut this year. Expectation right now has risen to two, perhaps even three cuts before the end of 2024. As a result, we can see that the dollar has been easing back and we all know the relationship between dollar and precious metals. As the dollar pulls back in expectation of imminent rate cuts, gold prices does looks like it is going to go higher. Now, I'll be referencing the Comex micro gold futures to show you what I mean in this short video clip.
Now I'll be using the Comex micro gold futures to illustrate whether there is any trading opportunity in gold right now. Okay, the micro gold futures symbol is MGC and this is one 10th the size of a regular gold futures contract at ten tri ounces. And the minimum price fluctuation is $0.10, equal to $1. And the available contract for trading is every even months for the next 24 months. Now, like the regular gold futures contract, gold is actually deliverable. Meaning to say that if you're holding a long position all the way to the last trading day, you are expected to take delivery. And if you are holding a short position, you must make delivery. And the termination of trading is on the third last business day for the contract month. And the last, but not the least, refers to the margin required to hold a position overnight. Whether you're holding long or short, you need to have, at the minimum for now, $1,000 in your trading account.
Now, let's get into the chart itself now, based on what we are seeing so far, we are looking at the weekly timeframe first. Now, weekly timeframe. We do not trade the weekly timeframe, but we're using the weekly timeframe to give us some kind of a roadmap we can see from the weekly timeframe. The gold market is in a massive bull market with the high trader at $2,454.20 on May 20. And of course, prices has since pulled back a little bit, resulting in a counter trend trade represented by the pink color box here. Okay. Prices traded to a high of $2,430.40 per ounce on Friday. Meaning to say that it does tell us that currently there is a counter trend in place beside the dominant trend. So your question here is, do you trade with the trend or do you want to trade against the trend?
Meaning to say that you are doing counter trend trade. Now there are times to do counter trend trade and there are times to trade with the market. Okay? So right now, the prices has already left the perimeter of the dominant trend. Meaning to say that it for those who are very adventurous, of course you can continue to chase the market. Then for people like me, then I will say, look, I look at a price and say it does not make sense to be trading with the trend with prices already so high. Okay? And what I want to do is to take a speculative counter trend trade that is also possible based on what we are seeing in the weekly timeframe.
Now, this is the daily timeframe. Of course, the chart will look slightly different. What we are seeing here is that the market is still having a dominant trend, which is still up. However, we also see that there is also the counter trend trade that I just mentioned in the weekly timeframe. Now, as we are seeing in the lower timeframe, which is one time scale lower, last Friday's high at 2430 cents actually was the best price to actually go into two counter trend trade. Because if I'm wrong, then my risk is actually very well contained. But if I'm right, I have the possibility of gunning for $2,257.10. So again, from the risk reward perspective, it makes a lot of sense to trade counter trend right now against trading with the trend. However, earlier on, before the market rises over the last fortnight or so, we can see that prices did pull back into this area here, which if you have been watching the market, they would have allowed you to buy at very, very low risk. And this is the area where you would have bought if you have followed the system. Because this area are where the low risk, high reward trade setup is. Because if you have bought anywhere within these two areas here, you are targeting a move towards the $2,588.60. Okay? So this is actually a fantastic risk reward ratio. However, if you have not already bought, prices right now is in the very deep retracement levels in the counter trend. So you have a choice to do counter trend if you want to.
Again, based on your risk profile now, this is the 4 hours timeframe. In this timeframe, you can see that the dominant trend is actually down because the bigger box. Watch the full video to learn more.
立即開戶
網頁咨詢
QQ
Whatsapp
