Its Finally Time To Get Excited About Gold
Last year in April I wrote an article outlining why Gold was not ready to run. At the time it was within a massive consolidation but had not broken out yet.
One year and one month later, its a much different story.
Gold has broken out.
And now it might be giving us another opportunity for a “low-risk” entry point.
I put “low risk” in quotes because the volatility level is insane. The futures contract on NYMEX can move $3000, $4000, $5000 dollars in a single day!
Keeping that in mind, lets take a look at the charts on the Weekly and Daily timeframes.
Point 1 on the weekly chart shows the breakout of the massive consolidation that we wrote about back in 2019. Point 2 is a retest of the breakout level. And, during March of this year when everything was being thrown out with the window, that level was again retested and HELD at point 3.
Now, after a $250 per oz run-up, we’re getting a pullback that is retesting the highs of a much smaller and sloppy consolidation level.
It is very possible that this level will hold which makes it a decent buy point.
Most of you reading this will likely need to execute this trade using the ETF – the stop level on the futures contracts will be something like $7500.00 per contract. Ouch.
The trade itself is pretty simple. Enter at the market. Stop level would be around $1625 basis June NYMEX Futures. This is the kind of trade that you want to hold as long as possible so there’s no target. If it works, it should work spectacularly well.
Disclosure: At the time of this writing, I hold an interest in products exposed to the gold market including the gold etfs and gold stocks.
Pending Consolidations In Gold
Photograph provided by canstockphoto.com
Gold has finally broken out of a massive consolidation level which means its time to buy pullbacks. Given the volatility you have to wait for deep pullbacks. Later as the trend matures, the pullbacks will get shallower and shallower. But for now, it is best to wait for the large ones into defined support areas. It looks like we have that now.
PS: don’t forget – if you have questions about the techniques used in this article, a simple 1 hour technical analysis coaching session can get all your questions answered!