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Gold Futures

 

Commodity trading is not suitable for everyone. The risk of loss in trading can be substantial. This material has been prepared by a sales or trading employee or agent of Van Commodities, Inc. and is, or is in the nature of, a solicitation. This material is not a research report prepared by Van Commodities, Inc. Research Department. Please view our Risk Disclaimer.  

 

Free in-depth analysis of the Gold futures market written by a professional Gold trader.

 

 

 

January 04, 2015

Gold Futures and Options Trader, Van Commodities, Inc.  

The Gold futures market closed December 31, 2014 down just short of two percent from the close on the last day of trade December 2013. Although the market was only marginally lower over the whole year, gold saw some large price swings with more than a twenty percent trading range.

 

Even with the dollar index rallying roughly fifteen percent during 2014, the current front month Gold Future (GCG15) has held up reasonably well. Significant weekly technical support for GCG15 is at 1170. A close below this support could send the contract back to test the contract lows with support at 1125.00-1132.00. If these levels were to give way GCG15 should find longer term support at 1085.00. Over the near term initial resistance may come in at 1200.00-1210.00 with stronger resistance at 1220.00-1230.00. 

 

March 31, 2013

Gold Futures Broker, Van Commodities, Inc.

It appears that instability in Europe, over the past couple of weeks, has been supportive of gold futures (GCM13). The crumbling Cypriot banking system and inability of Italy’s politicians to agree to a governing coalition, have renewed investor anxiety about the integrity of the Euro Zone’s banking system. Many investors question the safety of large deposits in banks of several Euro Zone countries and the implications appear to have undermined the Euro Currency and been supportive for GCM13.

 

GCM13 continues to trade in a range pointing to investor uncertainty about the future long term trend for gold. Profit taking by hedge funds in the Gold ETF (GLD), during the first quarter of the year, seems to have put downside pressure on gold. The political and financial uncertainty in the Euro Zone, along with geopolitical concerns in the Middle East and Korean peninsula, may provide support for GCM13 at the lower end of the range.

 

Next week traders will be looking at several events to provide price direction for GCM13.  Several Central Banks hold policy meetings next week, including the Reserve Bank of Australia (RBA) on Tuesday and the European Central Bank (ECB), Bank of England (BOE) and Bank of Japan (BOJ) on Thursday. A large number of economic statistics will also be released throughout next week. Some of the data includes Purchasing Managers Indices (PMI) from several regions globally, providing market participants with a perspective about manufacturing on an international basis. On Friday the market will be looking to the always important US Non Farm Payroll and Unemployment statistics.

 

Traders have tightened the larger GCM13 1560.00-1720.00 range of the past five months to 1560.00-1620.00 over the past twenty-six days. Uncertainties in Europe, the Middle East and Korean Peninsula may be supportive of gold futures, but the improving outlook for the US economy and increased global investor demand for US dollar based investments may continue to pressure GCM13.

 

Initial resistance for GCM13 may come in at 1618.00-1625.00. If GCM13 is able to break out above this range, stronger resistance may appear at 1650.00-1660.00. Over the near term initial support may come in at 1575.00 and then 1549.00-1560.00.

February 12, 2013

Gold Futures Broker, Van Commodities, Inc.

The gold future (GCM13) reversed overnight losses and traded firmly throughout US hours today. Several factors may have lent support to gold including news of a North Korean nuclear test and nervousness over President Obama’s State of the Union Address. Investors are possibly concerned that the Address may be the opening salvo for disagreements between the Administration and the Republican run House over how to deal with US debt issues and the upcoming sequester. With one side calling for tax hikes and the other side favoring entitlement cuts, there appears to be room for market concern and volatility over the coming weeks.

 

The sell off over the past sixteen days left GCM13 in a marginally oversold condition, based on several short term momentum indicators. The price action today was positive and further gains should be possible. Initial support may come in at 1646.00-1649.00 and stronger support at 1640. A move below 1640 would potentially open up a move towards 1629.00-1631.00. Over the near term initial resistance may come in at 1672.00-1681.00 and stronger resistance 1686.00-1700.00.

Gold Broker, November 3, 2012

The gold market, basis the December contract GCZ12 traded down 43 dollars Friday, November 02, 2012. The risk off day going into the close of the week saw the US dollar trade higher, stock indexes trade lower and most commodity prices sell off steeply. US Nonfarm Payrolls reported Friday as well as previous months’ revisions came in stronger than market forecasts and may have reduced expectations for further aggressive monetary stimulus by the US Federal Reserve. With US elections November 06, 2012 many market participants may have decided to take money off the table and GCZ12 has now erased all of its gains made since the Federal Reserve announced QE3.

 

GCZ12 is oversold based on short term momentum studies, but shows the potential for further selling on an intermediate term basis. Initial support for GCZ12 should appear 1665.00-1672.00 and then 1636.00-1650.00. Initial resistance comes in 1690.00-1709.00   and then 1721.00-1737.

Gold Futures Broker, April 30, 2012

COMEX gold futures closed marginally weaker today at 1662.5, basis the June futures contract (GCM12), after selling off at the start of the US day session and trading down $17 from Friday's close. Supporting the market is an underlying assumption that the Federal Reserve, at some point, will administer another dose of QE thereby undermining the US dollar and reflating a slowing economy.

US economic data today was somewhat mixed, but a bit more biased to further weakening for the economy. Personal Income was slightly stronger and Personal Spending was slightly weaker than expected, but both the Chicago PMI and the Dallas Fed's Manufacturing Survey came in weaker than expected. Market participants will be looking to tomorrows ISM Manufacturing Survey, Wednesday ADP data, Thursday's ISM Non Manufacturing data along with unemployment claims and Friday's all-important Non Farm Payrolls and Unemployment statistics. These data points should give investors a good overall view of the momentum or lack thereof for the US economy going into the end of the First Quarter and the start of the Second Quarter

GCM12 is trading in a tightening range. The large range is 1620 to 1790. A break of the 1620 area could send GCM12 towards 1550. On the upside GCM12 should find initial resistance around 1690 to 1700 and then 1740. A breakout above 1740 could see GCM move towards 1800.

Much will depend on the unfolding economic data and whether traders react to weakening US data as a deflationary signal. This would possibly result in the selling off of many asset classes by market participants. On the other hand investors could look past the weak data and towards some form of QE buy the Federal Reserve and the next round of attempted reflation.


April 2, 2012

Gold Broker, Van Commodities, Inc.

The dichotomy for the gold futures market is whether the technical chart structure of the June gold contract (GCM12) provides a bullish head and shoulders bottoming pattern for the bull camp, or a double top pattern for the bear camp.

Over the last several months, the fear trade in global financial markets has been subsiding, and the risk on trade has come back into favor. This has resulted in less investment demand for gold. The first reason for the swing in market sentiment away from the fear based trade of hoarding gold is based on the idea that central banks around the world have done enough, on a liquidity basis, to stem the imminent melt down of the Eurozone’s economy. The second reason for improved investor animal spirits is that economic numbers out of the U.S., over the last several months, have provided many market participants with a perspective that the U.S. economy is on the mend, resulting in higher stock markets, higher market driven Government bond market yields and less desire for gold, a non cash flow-non yielding oriented investment.

Today’s release of the FOMC minutes, for the most recent Federal Reserve meeting in March resulted in a knee jerk reaction by gold traders to sell. The minutes confirmed to the market that the FED is in no rush to embark on QE3, because the economy is expanding at a moderate level and employment levels in the U.S. are improving. Another factor in favor of the gold bears is that India’s gold imports have declined by around two-thirds from this time last year, due to a strike by gold merchants protesting additional government taxes on gold.

The price of gold has been trading in roughly a $400.00 range since hitting contract and nominal all time highs in September 2011 at $1922/ounce. The bottom end of the range is around 1523. The range over the last several months has tightened to 1800 on the upside with initial support around 1600 and then 1520. Today’s action displayed a minor breakdown for gold and some traders will be targeting a move to around 1590.

Commodity trading is not suitable for everyone. The risk of loss in trading can be substantial. The risk of loss in trading can be substantial. This material has been prepared by a sales or trading employee or agent of Van Commodities, Inc. and is, or is in the nature of, a solicition. This material is not a research report preparfed by Van Commodities, Inc. Research Department. Please view our Risk Disclaimer.

 
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