Let's talk about gold - XAUUSD

I wanted to create this thread for active gold traders to gather and share opinions about their outlook for gold as well as discussing strategies.

Gold is hotter than ever, with quantitative easing, low interest rates and skyrocketing government debt in the US...

Hello,

Gold has been a favorite of mine for a long time now. I am sort of a 'portfolio manager' who likes to actively trade as well. Fundamentals lead us to much higher gold; heading into the summer at least. Roll off of QE2 and hawkish language from the FED def provide longer term headwinds.

Why I love this site is I am new to technicals, scalping, and shorter term trading all together. Any and all technical advice for trading XAU is more than welcome. I would also be happy to share fundamental analysis as well!

Happy Trading

That sounds great, 'cause I am the opposite, I started as a technical guy, trading very short time frames, over time I have become more and more interested in fundamentals and looking for trades on the longer time frames. As of right night I would characterize myself as a carry trader.

Tomorrow I will write a post and share the strategy I have been using to trade gold...all input is welcome!

That would be great, thanks! I am new to the FX world, but I've been running a rather large 'macro' portfolio for a few years with relatively good success. New to the technicals and to what I hear is 'swing' trading. Would be happy to post any fundamental updates anyone would like to hear about. I have a BA and MA in Economics, plan on working towards a PhD in a few years; once I get my financial life in order.

I would love to learn more about charting techniques and technicals that are relevant and respond to gold. Long term - very bullish, short term???

Please do! Would definitely love to hear your commentary... Maybe even start a new thread on it.

why not join the existing thread which is approaching 5000 comments?

beeb

[quote=CindyXXXX;4590730]Please do! Would definitely love to hear your commentary...quote]

Hi Cindy - seems as though not may people care about fundamentals on this site, which is quite fine! I came hear to learn more about charting and techncals since I have a background in Economics/Finance. I can surely (hopefully) answer fundamental type questions if you may have 1 in mind.


Fundamental view from my eyes - Gold will resume it's uptrend soon, as investors and traders seek shelter from the fiat money game. Central banks around the world are in various phases of monetary policy, but most importantly, the US, is still very loose, with a hint of inflation. Both are good for gold statistically and historically. My feeling is QE2 will roll off as planned in the end of June, but the FED may continue to invest MBS/Treasury coupons and principal once the investments mature. End of June early July may provide a major headwind for gold if the Fed gets 'hawkish' in its langauge to the holi polli. Until then, the price action wil speak of course, but i see at least 1600 by June.

These are my last 3 trades on Gold (XAUUSD)...they are based on Pivot analisys, I will be writing a post later on sharing how I come up with these trends.

As y'all can see I am supposed to be in a short position right now, but I have taken profit this afternoon around $1,514, as NFP is coming up and I don't really like holding positions during those 48 hrs before NFP, the market can get really volatile, if I get a nice pull back and the trend is still intact, I might consider shorting it again with a tight stop.

By the way PhilaTr8er, what are your expectations for NFP and how do you think gold will react to it?

Ralph

Thanks for the tid bit of technicals, i look forward to learning some more. One thing i really need to learn is good techniques for where to get in and out.

NFP - Still way below trend historically. At expectations, no major move in the dollar, i would expect the same from gold. WE saw a preview today in the ADP, which was slighly disapointing, but not too bad. At this point int he cycle, given the down draw in jobs from 2008-2009, we should be creating over 2MM jobs per month, and we are only creating slighly over 200k. We will likely see a small disappointment vs concenus i feel, but nothing too dramatic.

http://data.bls.gov/generated_files/...4550791093.gif

Still only looking for short positions...trade has been working out great!

Ralph

I'd be interested to learn more about your pivots methods! i am also short and lucky at that! Most due to the downward slope of the major SMA's and EMA's, and the up volume in the short term down trend.

Hey there PhilaTr8er,

What I have been doing is basically looking at US dollar strength across the Forex market to determine my sentiment on Gold. So I look at the daily Pivots (highest price printed+lowest price printed+close price /divided by 3) and I have an indicator that calculates and plots it on the charts automatically.

Then what I do is look at the daily pivots for the 7 major currencies against the US dollar (EURUSD, GBPUSD, AUDUSD, NZDUSD, USDCHF, USDCAD and USDJPY), I do that at the open of every trading day, 0 HR GMT = 5 PM EST, That's when a new day technically starts in the Forex market.

If the new daily pivot moved higher than the previous day's pivot for the EURUSD, GBPUSD, AUDUSD and NZDUSD, that suggests dollar weakness, if the new daily pivots moved lower than the previous day's pivot for the USDCHF, USDCAD and USDJPY, it suggests the same.

If the opposite happens, it would obviously suggest dollar strength.

So that's what I do, If the pivots show dollar weakness for 4 or more of those pairs I will be looking for long Gold (XAUUSD) positions and if it shows strength, I will be looking for shorts.

At the beginning of each day I look across those pairs, based on my analysis and then I will draw either a green square or a red square on my gold charts only to remind me whether I am long or short for those following 24 hours, and that's What the squares mean on my charts.

So basically, my trades are based on daily time frames, I look to confirm or reverse my trend (long or short) once a day.

Ralph

As you can see on these charts, 4 out of the 7 pivots, are showing dollar strength, ie; suggesting a short position on Gold, that's why I mark them with a red square.

Ralph

This week has been quite RED for gold.

People kept adding longs at 1550, 1510, 1500, 1490, 1480, 1470 and so on, thinking that it was going to bounce, but gold keeps falling like a rollercoasterr.

Margin calls are all over the place in the gambling sallons.

I agree, a lot people covering their longs ahead of NFP and that is definitely causing major corrections across the board.

just updating he charts for the next 24hrs will still only be looking for shorts...US dollar price action showing overwhelming weakness across the board, I am not holding any potions right here, I will wait for Sunday before I consider shorting it again, possibly at 38% or 50% retracement on intraday basis.

Thanks a lot Ralph, a lot to digest, but great stuff! I have been reading to the significance of pivots, but your explaination is a bit better than the books. My only problem is I am looking to trade longer term, perhaps set trades up on Sunday and see how the pan out over the week. I have a full time job and work 55-65 hrs a week. But i suppose I could reiteriate your 24 hr thesis and expand it to a weekly horizon. We will see, thanks again for sharing!

NFP - given the recent ADP report and continuing claims, we may see a sub 185K est. for tomorrows figure.

Looks like this month's NFP did not have much of an impact on the market, market did a good job pricing it in ahead of time, but the Greece issue seems to be back, and this could cause more risk aversion and a further strengthening of the US dollar making Gold (XAUUSD) drop even further.

We will see what happens on Sunday at the open, a gap up, could be a good chance to short.

You can absolutely apply the same rules to weekly time frames as well.

so you are saying it will keep falling? What makes you think so?