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.

RETEST LEVELS

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

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.