|
Z Succeass inn Finaenciarl S ervGices Sirnceo 1980u p August 6, 2008 GOLD FUTURES: STILL GOLDEN OR HAS THE GLITTER WORN OFF? A Review of Recent Price History The bull market in gold started in mid-2002. At first prices climbed slowly.taking three years to move from $350.00 per ounce to $450.00. But by the fourth quarter of 2005 events started to heat up and Gold rallied $250 (from $450 to $700) in just two years. And then, in September 2007, prices just skyrocketed. Gold futures shot up almost $400 an ounce in less than seven months. The front month futures contract recorded an all-time high of $1,033.90 an ounce! [see chart #1] CHART #1 Monthly Bar Chart, showing nearest-to-deliver futures contract
Transactions in futures, options, & forex carry a high degree of risk. Traders can and do lose money. 150 S. Wacker Dr., Ste. 2350, Chicago, IL 60606 1-800-USA-MORE Fax: (312) 277-0150 e-mail: info@zaner.com www.zaner.com Z Succeass inn Finaenciarl S ervGices Sirnceo 1980u p But when we switch to a Weekly bar chart [chart #2] we can see that the market has been in a congestion ndphase for most of the 2 quarter this year. And the Daily Bar Chart reveals an entirely different picture..a market that has declined approximately 11% in just fifteen days. [chart #3] Chart # 2, Weekly Bar Chart, August 27, 2007 - August 4, 2008
Chart # 3, Daily Bar Chart, May 28-August 5, 2008
Transactions in futures, options, & forex carry a high degree of risk. Traders can and do lose money. 150 S. Wacker Dr., Ste. 2350, Chicago, IL 60606 1-800-USA-MORE Fax: (312) 277-0150 e-mail: info@zaner.com www.zaner.com Z Succe ass inn Finaenciarl S ervGices Sirnceo 1980u p Where Are We Today? Clearly seeing gold fall by a startling $118 an ounce in just 15 trading sessions highlights a potentially overdone technical condition in gold but some traders suggested that the sharp decline in oil prices might actually be poised to support gold prices in the event that forward economic expectations are revived. In other words, some players are suggesting that the flight to quality liquidation effort in gold might have run its course. For gold prices to recover, might now require evidence of growth and subsequent inflation pressures. Clearly a $118 an ounce decline in 15 days is an aggressive washout and clearly the October gold contract has garnered at least some temporary support from the $875 level. However, while the downtrend might be stalled for now, the bull camp will probably need evidence of growth and inflation to mount anything more than a simple technical short covering bounce to $900. Zaner's options strategist, Larry Baer, is looking for a significant move to the downside, and suggests purchasing September put options [see chart #4]. His Candlestick chart formations, using MACD, Moving Averages ( 20-day in red and the 9-day in green) and Bollinger bands (illustrated by the blue lines).
Trans actions in futures, options, & forex carry a high degree of risk. Traders can and do lose money. 150 S. Wacker Dr., Ste. 2350, Chicago, IL 60606 1-800-USA-MORE Fax: (312) 277-0150 e-mail: info@zaner.com www.zaner.com Z Succeass inn Finaenciarl S ervGices Sirnceo 1980u p Trading Gold Futures and Options Traders have a variety of investment vehicles to utilize for trading and investing in gold. At Zaner Group, we prefer Gold Futures and Options on Gold Futures. At the time of this report (August 6, 2008) we feel there is still downward pressure on gold and would favor purchasing put options. However, we recognize that many investors, looking at an economy buffeted by one credit crises after another and the specter of inflation, may not agree. For such investors drawn to the "long" side of the market, we suggest sitting on the sidelines for the present, and watch the market's reaction to the next possible consolidation phase. This is where we can be of service. Let Zaner's brokers help you navigate through investment choices and help you create a trading strategy based on your own trading penchant for risk and reward. Who is the Zaner Group? Established by traders for traders. In 1980 Zaner Group pledged to provide its customers with superior brokerage, execution and clearing in futures. It has followed through on that promise. Since then, our business has grown - encompassing commodities, options, f... [download for more]
|
