Get started
Gold Futures (Feb 2018)Gold Futures (Feb 2018)Gold Futures (Feb 2018)

Gold Futures (Feb 2018)

No trades
See on Supercharts
Overview News
Ideas
Forward curve Contracts

GCG2018 trade ideas

Gold as an Inflation Hedge? Myth Busted!COMEX: Micro Gold Futures ( COMEX_MINI:MGC1! ) and Gold Options ( COMEX:GC1! ) Gold is often hailed as an effective hedge against inflation. It generally increases in value as the purchasing power of the US dollar declines over time. Does this still remain true? Since January 2013, the US Consumer Price Index increased 29.4% cumulatively, while the 10-year total return of Gold is only 11.3%. Let’s demystify the gold myth. In fact, gold is by no means among the best-performing investment assets in the past decade! Let’s look at where investing $10,000 in different assets would take you in the past ten years: • If you held $10,000 in cash, you still have $10,000, a 0% nominal return; • If you bought a gold ETF fund, you would have $11,300, assuming it tracks gold price perfectly. However, after subtracting an average 0.5% a year in fund expense, you would end up with only $10,800, an annual return of merely 0.78%; • 5-year bank certificate of deposit (CD) yielded 1.0%/APR in 2013 and 1.5% in 2018. If you put the money in CDs back-to-back, you would have $11,322 now; • If you invest in a market index stock portfolio, the S&P 500 gained 159% in the past ten years. You would end up with $25,900; • If you bought bitcoin at $4.43 each in January 2013, you would have amassed nearly $1.6 million from the original $10K, an astonishing 15943% return! Actual data shows that holding gold, a non-yielding asset, underperformed other investable assets in the past decade. Gold price endured a double-digit decline, from $1,600 per troy ounce, to as low as $1,000, during the low-inflation period of 2013-2018. It shot up in 2019 as the US-China trade conflict intensified. The outbreak of Covid pandemic pushed gold to a record high of $2,075 in August 2020. As US economy remerged from Covid in 2021, gold price fell back to $1,700. Then, the Russia-Ukraine conflict pushed it back up above $1,900. However, when the Federal Reserve embarked on the path of rate increases, gold price fell sharply to $1,600. This was a period where US CPI raged between 7-9%, and gold completely failed as a defense against inflation. US Dollar Is the Primary Price Driver Gold prices rose on Friday as a rally in the dollar and bond yields paused. COMEX Gold Futures (GC) for April delivery closed up $14.10 to $1,854.60 per ounce. The rise comes on expectations that higher interest rates are on the way as reports show that US economy is still running too hot to quell high inflation. Dollar index was down 0.35 points to 104.68, while the US 10-year note was paying 3.977%, down 8.4 basis points. US dollar continues to call the shot for gold as investors assess the Fed's rate path. The above chart shows a perfect negative correlation between gold price and dollar index. When dollar rises, gold falls; and when dollar declines, gold advances. Last month, the dollar's bounce had weighed heavily on gold. The dollar rallied as a run of hot U.S. labor and inflation data saw traders’ expectations for more aggressive Fed rate increases. A stronger dollar can be a drag on commodities priced in dollar, making them more expensive to users of other currencies. In recent weeks, gold may have found some support on fears that an aggressive Fed could push the U.S. economy into recession, but a continued rise in U.S. Treasury yields, along with a relatively resilient dollar means limited upside . Rising Treasury yields raise the opportunity cost of holding non-yielding assets, like gold. Short-term Trading Strategies At $1,850, gold is neither too expensive nor too cheap by historical standard. As such, I am not in favor of an outright directional trade, one way or the other. However, the market’s razor-thin focus on Fed rate actions will make a compelling reason for event-driven trades on Gold Futures and Gold Options. March is a very active month for macro-economic data releases: • March 8th, Fed Chair Powell will testify on the central bank's semi-annual monetary policy report to the House Financial Services Committee; • March 10th, Bureau of Labor Statistics will release February employment report; • March 14th, BLS will release the February CPI report; • March 22nd, Fed will announce its interest rate decision. Financial market tends to be sensitive to these data releases, as the latter could deliver huge shocks if actual data goes beyond market expectations. If you expect an upcoming data release to be bullish on gold, you could express this view with a long futures position on COMEX Micro Gold Futures (MGC). Each MGC contract has a notional value of 10 troy ounces. At $1,880, a June 2023 contract (MGCM3) is valued at $18,800. Initiating a long or short position requires a margin of $740. This is approximately 4% of contract notional value. In comparison, buying physical gold (i.e., gold bar or gold coin) and gold ETF fund requires 100% upfront investment. If gold price moves up to $1,950, the futures account would gain $700. Relative to the initial margin, this would equate to a return of +94.6%, excluding commissions. Alternatively, the same bullish view could be expressed by a call option of COMEX Gold Futures. Each COMEX Gold Future contract has a notional value of 100 troy ounces. At $1,880, a June futures contract (GCM3) is valued at $188,000. A call option on the 1,900 strike is quoted 37.0 on 3 March 2023. Acquiring 1 option requires an upfront premium of $3,700 (100 ounces per contract). If gold moves up to $1,950, the options account would be credited by $5,000 (=(1950-1900) x100), which represents a theoretical return of +35.1% from the original investment of $3,700. If you are bearish on gold, a short MGC futures or a put option on GC would be appropriate. Futures and options account would gain in value if the price of gold falls. Similar to investing in physical gold or gold ETFs, the biggest investment risk is betting the wrong direction. However, futures have a built-in leverage. In the case of MGC, each $1 movement in gold price translate into $10 variance in futures account balance. Options have a non-linear payout diagram. As the contract moves deeper in-the-money, options value grows exponentially. Long-term Trading Ideas After the active central bank action period is over, will gold price trend up or down? What would be the primary driver of gold price? Inflation, US dollar, interest rate, economic growth, or geopolitical crisis? All are possible, maybe a little bit of each. My research reveals that gold price has a relatively stable relationship with WTI crude oil (CL). Over the past ten years, each 1,000 barrels of WTI (1 CL) sell at a price between 150 and 300 ounces of gold for about 80% of the time. We could visualize an oil producer wanting to be paid by gold. When dollar fluctuates, he would adjust the dollar selling price to keep his gold acquisition stable. Therefore, whenever the price range is breached, gold price has a strong tendency of falling back in. In the next writing, I would explore a convergence/divergence idea between GC and CL. Stay tuned! 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 trade set-ups and express my market views. If you have futures in your trading portfolio, check out on CME Group data plans in TradingView that suit your trading needs www.tradingview.com
COMEX:GC1!Long
by JimHuangChicago
2
Gold: Reversal at upper range limiCOMEX:GC1! is traiding since Sept 2020 in range between 1690 und 1985. Currently the price action is the upper range limit. A analysis of COT index indicates a short signal, which comes along with high open interest oscillator. This two indicators my forecast a reversal of the uptrend COMEX:GC1! . Since the price shows a still a stable uptrend (price is above 18EMA) the timing is currently difficult. A first indication of weakness would be daily close below 18EMA. A strong sign a weakness and an indication of weakness is below the last minor support area, which has its lower limit 1915. SL: 1980 ~above current high 1. Target: 1825 ~ next support area 2. Target: 1693 ~ lower range limit RR w/ 1. target 1.38 Manage your risk and make your own decisions.
COMEX:GC1!Short
by MichiBTC2021
Gold GC1 - Discard Greed, Enjoy the Tranquility of RationalityGold is one of those things that has always made humans go mad with greed. There's a deeper reason for this that people can't quite grasp on the surface, but the metal has significant inner meaning for many cultures, families, societies, and belief systems. I've heard over the last few weeks that the Chinese Communist Party has been buying tons and tons of gold, and this news has been used to drive the price back to that $1,923 ATH, which for many years, nobody thought would ever come again, and then happened again after COVID, and then was lost. But you should always remember when a government and a central bank is in trouble, and the CCP is in significant trouble with the damage Wuhan Pneumonia and Xi Jinping's worthless "Zero COVID" social credit persecution of his own people has wrought to the Chinese economy, they tend to buy a lot of gold in an effort to make the situation look "totally great." But gold is hard to trade for critical commodities like oil and food, and USD still reigns supreme, whether you like it or not. Of all regimes, the worthless and wicked CCP is the one you want to trust the least. Really, those rogues are the ones you ought have so little faith in that you totally oppose them and cheer on their annihilation. Never forget these words: 'China' is not 'the CCP'. Moreover, Washington/NATO are also not a big fan of Xi's control of the Party. When a whale takes a big speculative cash position, those who count as "Gods" are given an opportunity to dump it in the other direction, forcing their opponent to sell huge quantities of bullion at a loss. Xi and his beloved CCP barely even count as whales at this point in history. They're about as much of a "whale" as Sam Bankman-Fried and FTX were. Think that one over. Moreover, Jim Cramer said in July of 2022 that gold "is one of three things that 'holds its value in a recession.'" Well, gold followed everything else to dump during 2020 COVID hysteria, and it lost 30% of its value during the '08 Financial Crisis too. Here's the problem with gold making a new all-time high this easily: 1. When gold makes a new $2,100+ ATH, it should really take off for a "commodities supercycle" like wheat, copper, soy, corn did last year. 2. Gold's trading to the $1,630 range was merely a gap fill from the April COVID rebound run 3. $1,630 is still $100 above total long-term range equilibrium 3 (b). This means a new ATH now would indicate a stop raid followed by an eternal dump. Possible, but not very likely at this point in history. What I believe will happen is this: Gold will run $1,940 - $1,960, sweeping breakout traders and goldbugs, and finally get hard rejected Gold will pretty much straight line dumpster fire towards a price that is worse than the $1,569 range equilibrium Nasdaq and tech stocks are going to rally so hard that some items like Tesla, Apple, and probably the index itself, are going to form a Bump and Run Reversal Commodities dump as equities are used to draw in "err'body" because they're the only thing going uppy since oil is dumpin' Gold will start to rally once the stocks that draw in retail dead money are topping and are being distributed Gold, oil, and natural gas will go hard as equities begin to languish and correct $3,100 gold will be the signal that every market has met its fated end In terms of timing, the Bank of Japan does its monetary policy thing on Tuesday, and with how much Yen it has had to print to maintain the (all new) 0.50% cap on 10Y bonds, we can expect they will be forced to relax Yield Curve Control again, probably to 1% Imo, this will cause markets to dump and arguably be choppy, but on the recovery/bull side heading into Feb. 1 FOMC. Markets will feign "indecisive" until Feb. 1 FOMC, which is likely to be a 0.25% FFR hike, triggering a mega rally in equities, a rally which commodities stop tracking. All of the above amounts to an exit rally for Japan's old money, which is a simply fundamental driver in the equities market as one of the most liquid populous seeks yield that its own central bank has refused for years to offer. When the 10Y JGB yield is 1.5% Japanese money will leave US equities and start buying its own bonds. YCC will ultimately be relaxed way beyond 1.5%. Once the markets start to dump is likely to be in the middle of the year when the Federal Reserve finally pivots on interest rates. Contrary to the narrative espoused, major market corrections have often followed a Fed pivot, so long as it occurs when the market isn't embroiled in GFC/COVID chaos. The caveat to all this is that if the Chinese Communist Party were to collapse, because of a combination of Xi Jinping is an idiot and the Wuhan Pneumonia pandemic inside China reveals itself to mankind as totally out of control, then everything that has been planned to break both bulls and bears alike will be sharply truncated by a 2,000 point Monday morning SPX gap down. Gold, oil, natural gas, equities, bonds, everything will die like the FTX token did. Nothing will bounce. It's very dangerous. It's very hard to avoid. When people are "bullish on China," what they really mean is that they're bullish on the CCP. This is the hallmark of a total fool. Don't be that imbecile. What a truly wise man does is to make as much cash as possible in lieu of the day that the evil Communist Party and its organ harvesting of Falun Gong and Uyghurs collapses. That is the day you invest in "China" and its 5,000 years of dynasties, its traditional culture, and the Divine path. If you can do that, you'll make Warren Buffett look like a blip on the radar in history. For real.
COMEX:GC1!Short
by LordWrymouth
3
What are the investment considerations?Investing involves risks, and financial planning requires caution. Therefore, the following issues need to be considered when investing: 1.Don't put all your eggs in one basket. Diversify your investments to effectively reduce risk. 2.Generally, the rate of return and risk level are positively correlated. Don't only focus on returns and ignore risk. 3.Assess your risk tolerance and choose investment products that are suitable for your financial strength and risk tolerance. 4.Don't expect to get rich quick. High-risk investments such as stocks require extra caution, and the investment proportion should not be too large. 5.Investing requires a certain level of professional knowledge. Thorough and comprehensive understanding of the product is necessary. Follow me for more updates on financial knowledge and practical technical analysis.
BIST:XAUUSD1!Education
by StarVenus-
Do you have the mindset required for investing?In fact, futures investment is very simple to talk about, with only two choices: long and short, a 50% probability event. But why is it so difficult to succeed? Have you carefully examined the reasons for your losses? Have you summarized them? Sometimes it's not about choosing the wrong direction, but choosing the right direction and not going the right way. At this time, mentality is particularly important. Traders may know a person - Livermore, whose book "Reminiscences of a Stock Operator" is regarded as a bible by countless speculators. The book states that there are two main emotions in the investment market: hope and fear - hope is often generated by greed, while fear is often generated by ignorance. Controlling your emotions is a speculator's real hope, fear, and greed. They are hidden in our hearts and are waiting outside the market, waiting for the opportunity to make a big profit. Hope is crucial for human survival. But hope and the cousins in the investment market - ignorance, greed, fear, and distorted reasoning are the same. Hope covers up the facts, but the investment market only recognizes facts. The result is objective, final, and unchangeable, like nature. You will find that many very spiritual traders have accurate judgments about the market but cannot hold onto their money, resulting in long-term losses. The two main sins of trading are indulging in risk and terminating profits. The former is to hold a hopeful attitude towards a position, and the latter is to be worried about profits. People with a better mentality are either the result of being very disciplined or having abundant capital and can afford to lose, so their behavior is not easily deviated. Those who want to make quick and big money often lose money instead. Those who appear to be slow and steady may find that their assets have multiplied several times after a year. People who can exit the market when things go wrong have the ability to lose, because they know that the current situation is unfavorable, and patience will always bring opportunities. If someone rushes in with hot blood, the result may be a margin call. A bad mentality probably stems from being unable to afford to lose and trying to take shortcuts. So how to solve these two problems? When the position is smaller, the impact of losses on traders is smaller, so it is easier to accept losses and mistakes. Usually, few people can do what they say. The solution for ordinary people is to use the "boiling frog" method - habitually reducing the size of the position from 1 lot to 0.9 lots, then to 0.8 lots, and so on over time until it meets their own principles of capital management. It takes three weeks to develop a habit, so be prepared for a long battle. On the other hand, time is the basis for achieving compound interest, and it also requires a long battle. Those who achieve great things, both now and in the past, often come from self-discipline in small matters. In trading and life, do not commit small evils. Taking shortcuts and being heavily invested will result in only two outcomes: huge profits and huge losses. In the short term, there may be huge profits, but in the long term, the probability of huge losses is even greater. Heavy positions mean that you do not have many opportunities to make mistakes, and even one mistake can make your funds disappear. Light... (The text ends abruptly, possibly due to an incomplete copy.) FXOPEN:XAUUSD FX:EURUSD BINANCE:BTCUSDT BINANCE:BTCUSDT
BIST:XAUUSD1!
by StarVenus-
Gold traded within the range of 1816-1832 After forming a double bottom structure, gold quickly broke through the resistance level of $1820 and rose to around $1826 before pulling back to $1820. Therefore, $1820 has now become a support level, and there are currently two main resistance levels, one around $1826-$1828 and the other around $1832. Based on this, for today's trading, I suggest buying at the support levels of $1820 and $1816 with a take-profit target of $1826. If it breaks through $1828, then go long with a take-profit target of $1832. I will continue to monitor the trend of gold and share my thoughts. Thank you for your attention and support.
COMEX:GC1!Short
by triumphing