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GOLDM1! trade ideas

GC: Gold Reaches Record High on Hope of Fed Rate CutsCOMEX: Gold Options ( COMEX:GC1! ) Gold prices rallied to an all-time high on Friday. Spot gold climbed 1.6% to $2,069 per ounce, up 3.4% for the week. Gold price rose to $2,075 mid-session to beat the previous record of $2,072 reached in 2020. U.S. gold futures also broke new ground. The February 2024 contract of COMEX gold futures settled at a record high of $2,089.7, up 1.6% for the week. On Friday, gold futures trade volume was 259,889 lots, with open interest standing at 498,685 contracts. Options on the COMEX gold futures also attracted investor attention. On Friday, total options volume was 92,906, up 112% from the prior day. Open interest was 806,297 lots. For the lead February 2024 contracts, investors bought 19,565 call options and 6,894 put options. A call-to-put ratio of 2.83:1 indicates that investors are very bullish on gold. Gold prices have been pumped up on investor hype that the Federal Reserve may have completed its monetary tightening policy and could start cutting rates as early as March. How high could gold price go? Since last year, I have written extensively about gold on TradingView. Let’s revisit the fundamental drivers of the global gold market. Gold as an Inflation Hedge Gold has historically been an excellent hedge against inflation because its price tends to rise when the cost-of-living increases. The US CPI Index has a base value of 100 set at 1982-1984. Its latest reading in October is 307.7. Over the last 40 years, the cost of US goods and services has tripled on average. The year-end gold price between 1982 and 1984 averaged $378. As of Friday, the bullion gained 447% for the same period. Over the long run, investing in gold does beat inflation. Gold as a Precious Metal As a commodity, gold is negatively correlated to the US dollar. Since gold is priced in dollar, a strong dollar raises the cost for foreign investors who must pay more with weakened foreign currency. This reduces the demand for gold. “Strong Dollar, Weak Commodities” is the general theme in global commodities market, gold included. A closely related theme is “Higher Rates, Lower Prices”. Higher interest rates and Treasury bond yields raise the opportunity cost of holding non-yielding gold. Unlike other commodities, gold is not consumed or used up every year. Therefore, gold mining output is not a major factor in the pricing of gold. Gold as a Safe Haven Investment Gold retains its value in times of both financial chaos and geopolitical crises. People flee to its relative safety when world tensions rise. During such times, gold often outperforms other investments. In the past two decades, gold price peaked during the 2008 financial crisis, the 2010 European debt crisis, the 2018-19 US-China trade conflict, the outbreak of COVID pandemic, the Russia-Ukraine conflict, and the March 2023 U.S. bank run. Gold as an Investment Class As an investment class, gold competes for investor money along with stocks, bonds, cryptos and money-market funds. Even at record high, gold gained only 13.2% year-to-date, underperforming S&P 500 (+19.6%), Nasdaq 100 (+46.4%) and Bitcoin (+136.0%). A False Narrative on Monetary Easing The recent rise in the stocks and gold is largely shaped by the changes in market sentiment. Investors believe that the Fed is shifting gears from restricted to easing policy. Looking back in the past two years, market sentiment might not be the most reliable gauge of the Fed’s next step of action. The market has called for the Fed Pivot prematurely and incorrectly multiple times. We will need to wait and see what’s happening next. In his speech at Spelman College in Atlanta on Friday, the Fed Chair said that “the risks of under- and over-tightening are becoming more balanced,” but the Fed is not thinking about lowering rates right now. Investors focus on the current rate well into restrictive territory, but pointedly ignore the warning that it was premature to speculate on easing rates. The confirmation bias is at work here. They hear what they want to hear and create a new narrative that rate cuts will come sooner. Pricing in 5-6 rate cuts in a year is very aggressive. The Fed Chair has been accused of being too late to act, seeing inflation transitory earlier on. When it comes to cutting rates, the Fed would be very cautious, and at a very slow and measured pace. Trading Opportunities with Gold Options Market fundamentals haven’t changed. Market sentiment, however, has shifted. The aggressive rate-cut assumption has the effect of lowering the expected interest rates. This helps raise the present value of future cash flows. Hence, stock value goes up. Lower bond yield reduces the disadvantage of holding the non-yielding gold, and the US dollar weakening makes gold more attractive to foreign buyers. This bull market is vulnerable. If investors adjust their rate-cut assumptions from 5-6 to 2-3 times, the market could turn nosediving. However, investors set their sight on rate cuts and will not abandon it until the fact rejects the false narrative. Gold has a so-called “Santa Claus rally” and could continue for a while. The Fed Chair’s statement could become more convincing if: • Nonfarm payroll stays strong (December 8th) • CPI stops falling (December 12th) • The Fed keeps rate unchanged and emphasizes on fighting inflation (December 13th) Options on COMEX Gold Futures (GC) could be a cost-efficient and risk-mitigated way to express one’s opinion on how quickly the Fed would cut rates. Each options contract is based on 1 futures contract and has a notional value of 100 troy ounces of gold. At $2,089.7, each contract is worth $208,970. For illustration purpose: For the February 2024 contract, an out-of-the-money (OTM) call at 2190 ($100 above futures price) is quoted at 18.80. To acquire 1 call options requires an upfront premium of $1,880 (= 18.80 x 100 ounces). An OTM put at 1990 ($100 below futures price) is quoted at 9.00. To acquire 1 put requires an upfront premium of $900 (= 9.00 x 100 ounces). Options premium is significantly lower than futures margin, which stands at $7,800 per contract. It’s a fraction of the cost if you were to buy 100 ounces of gold in the spot market. If the trader buys a call and gold futures goes up, his account will increase in value. Unlike investing in spot gold or gold futures, the payoff in options is nonlinear, determining by the Black-Scholes option model. Similarly, when the trader buys a put and gold futures declines, he would also make a profit. On the flip side, the trader could lose money if the market moves against him. But the maximum loss is capped at the upfront premium. Happy Trading. Disclaimers *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
Editors' picks
COMEX:GC1!
by JimHuangChicago
7
Gold hits Record High on Bets for March Start to Fed Rate cutsGold prices rallied to an all-time high on Friday after remarks from Federal Reserve Chair Jerome Powell increased traders' confidence the U.S. central bank had completed its monetary policy tightening and could cut rates starting March. Spot gold climbed 1.6% to $2,069.10 per ounce by 3:30 p.m. ET (2030 GMT). Prices were 3.4% higher so far this week, and earlier rose to $2,075.09 per ounce to beat the previous all-time high of $2,072.49 scaled in 2020. Powell said "the risks of under- and over-tightening are becoming more balanced," but the Fed is not thinking about lowering rates right now. "Gold bulls are focusing on Powell's comment that rate is well into restrictive territory which plays into the narrative that cuts will come sooner, pointedly ignoring his warning that it was premature to speculate on easing rates," Tai Wong, a New York-based independent metals trader. Markets added to bets of a March start to rate cuts and an interest rate of under 4% by the end of next year. Lower interest rates reduce the opportunity cost of holding zero-yield gold. But, "prices may have entered overbought territory and gold has been known to price in monetary policy expectations prematurely over the past two years," Standard Chartered analyst Suki Cooper said in a note. Boosting bullion's appeal, benchmark 10-year Treasury yields slipped to a 12-week low and the dollar (.DXY) ticked 0.3% lower.
COMEX:GC1!Long
by DEXWireNews
Gold price forecast in weekly timeAccording to the majority, there is no certainty in the financial markets But with the style that I analyze, the prediction of some movements is certain. Definitely, the price level of 2000 dollars in gold is a fake price area, and due to the huge liquidity of sellers' stops behind this area, we will witness a hunt in this area, and this recent fall of gold is only for misleading. There is a huge scam going on in this rare metal finder that I will explain more in the future...
COMEX:GC1!Long
by fiftytwohertzwhale
🌟📈 GOLD: New All-Time Highs - A Heavenly Surge! 🚀💰🌟📈 GOLD: New All-Time Highs - A Heavenly Surge! 🚀💰 🔍 Analysis: Gold has just achieved an incredible milestone, setting new all-time highs! This isn't just a fleeting moment; it's the beginning of a potential journey towards ambitious targets at 2134, 2250, and possibly even 2400. Let's dive into what this means for the market and how you can capitalize on this golden opportunity. 📊✨ 1️⃣ Why This Matters: The surge to new highs isn't just a number; it reflects a significant shift in the market sentiment and economic indicators. Understanding the drivers behind this move is crucial for strategic trading decisions. 🌍🔑 2️⃣ Technical Perspective: We're observing some fascinating patterns and trends that align with this breakthrough. I'll break down the key technical levels and indicators that signaled this rise, providing insights for both seasoned traders and beginners. 📉📚 3️⃣ Future Outlook: With gold reaching new heights, what can we expect moving forward? We'll explore potential scenarios and strategies to stay ahead in this dynamic market. 🚦🚀 🤝 Educational Takeaway: Whether you're looking to trade gold or just understand its impact on the broader market, this event offers valuable lessons. Stay tuned as we unpack the significance of this historic high. 🎓💼 🔔 Stay Informed: Follow for more updates, analysis, and expert insights into the world of trading. Your success is our mission! 📈🌟 One Love, The FXPROFESSOR ♡ we had called it at a lovely time:
COMEX:GC1!Long
by FX_Professor
1
Gold inverse head and shoulder monthly chartInverse head and shoulder pattern playing out on the monthly gold chart. Remember this is a monthly chart and it takes time to play out. Last time it happens gold rallied allot. If the upper support breaks we can expect a target of 2500. Miners are really undervalued and are leveraged for enormous cash flow and profit if gold price rice. The difference this time is that the world is buying gold and not dollars to have reserves, rather then US treasuries. That combined with lower or stable inflation and lower or stable energy prices, then gold miners have a perfect lottery for positive balance sheets. My favorite Gold/Copper stock that is extremely undervalued and where BHP took a massive stake recently because of ongoing drill success is Brixton Metals Corp, symbol: BBB trades on Canadian exchange. Disclaimer, i own stock with shares.
COMEX:GC1!Long
by TradingIsNotGambling
Trading plan for GBP/USD on November 27. Simple tips for beginneThe GBP/USD pair continued to trade higher on Friday. We have repeatedly mentioned that it has been illogical for the pound to rise further, but at the same time, the uptrend remains intact, and the trendline is present. Therefore, the pair will continue to rise until the current trend is broken. On Friday, there was no interesting event in the UK that could provoke an upward movement. Nevertheless, the price started moving up practically from the morning. During the US session, three reports on business activity in the US were released, but the data turned out mixed, as one report was stronger than expected, the second was weaker, and the third is of little interest to us.
COMEX:GCZ2023
by Xauusdkingfx
Gold Futures and swing trade optionsCurrently swing trading Gold call options and use the futures chart for analysis of price. Notice how price reverse from my point of interest at the bottom of the chart and then started making higher highs and higher lows. After price broke structure and retraced back to discount of the range I bought. As you can see there were multiple opportunities to go long. Took some profit along the way. Still have a position open for my target. Enjoying the clarity of the 4hr chart.
COMEX:GCZ2023
by ChrisCPT1974
4
Are we setting up for another Gold Christmas rally?After a week of holiday trading volume, weakness in the U.S. Dollar continued after deteriorating economic data opened the door for the Fed's first interest rate cut in 2024. As of this writing, the first interest rate cut has a 23% chance in March 2024 and has pressured 10-year Treasury yields from a cycle high of 5.05% on October 23rd down to the November low of 4.36%. That selloff has sparked renewed interest in the bullion, where ETF inflows have picked up after hitting their lowest level since 2020. While the conflict in the Middle East has been subsiding, geopolitical uncertainties should underpin prices in the long term. Taking it to the Charts Technically, it was a constructive week for Gold, with prices consolidating above the 200 DMA ($1982) and looking to challenge recent resistance at $2020. Any breach above should trigger the next wave of short covering followed by fresh buying. Momentum studies are turning higher, with stochastics rising from oversold territory, followed by the MACD histogram, which is also beginning to rise. Remember that every bull market starts with a short-covering rally. Where is my line in the sand? Pocket support for Gold is between $1955 and the 50 DMA at $1944, where any close below this level could spark "panic" liquidation. We see value in adding to Gold positions near the 200 DMA. www.tradingview.com CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs Disclaimers *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
COMEX:GC1!Long
by Phil_Blue_Line
GOLD What will happen in the near future!!Gold is in a large ascending triangle on the weekly time frame and also at C&H if it follows these patterns we would have seen gold's biggest historical rally. 🤑Stay awesome my friends. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ✅Thank you, and for more ideas, hit ❤️Like❤️ and 🌟Follow🌟! ⤵️⤵️⤵️⤵️⤵️⤵️⤵️⤵️⤵️⤵️⤵️⤵️⤵️⤵️⤵️⤵️⤵️⤵️⤵️⤵️⤵️⤵️⤵️
COMEX:GC1!Long
by CobraVanguard
3
Gold ABCD formation where D point indicates price level 2022$In technical analysis, the ABCD pattern is a geometric price pattern that is used to predict potential price movements. The pattern consists of three legs, marked as AB, BC, and CD, and it is completed when the CD leg is equal in length to the AB leg. The Fibonacci retracement levels, such as the 0.50 level, are often used to identify potential reversal points in the market. If the D point of the bearish ABCD pattern is expected to be completed at a price level of $2022 and the C point aligns with the 0.50 Fibonacci retracement level, it suggests a potential bearish reversal at that specific price level. Traders and investors often use these patterns and Fibonacci retracement levels as part of their technical analysis to make informed decisions about buying or selling assets. It's important to note that while technical analysis can provide useful insights, it is not foolproof, and market conditions can change rapidly. It's advisable to use multiple indicators and analysis methods and consider other factors such as market sentiment, economic indicators, and geopolitical events when making trading decisions. Always remember that past price movements are not indicative of future results, and it's crucial to manage risk and use proper risk management strategies in trading. If you're not already familiar with it, you may want to consult with a financial professional or do further research to enhance your understanding of technical analysis and trading strategies.
COMEX:GC1!Long
by AGCL
2