-- Published: Friday, 27 January 2017 | Print | Disqus
The next three days are very crucial for gold and silver despite the current bearish technicals. Crude oil is bullish. Copper is in a neutral zone. Physical demand for gold and silver has been below expectations (despite the Chinese New Year). In the short term the direction of the US stock markets and the trend of the US dollar will dictate gold and silver prices. Copper and crude oil prices will get swayed by demand and supply news. Traders will also start taking positions for next week’s US jobs numbers. My trading strategy is that I will prefer to look for signs of a trend reversal in gold and silver.
Why do people incur losses in commodity trading and the best way to trade.
A lot of people tell me that they have mostly lost money in commodity futures trading. To me there are two ways of trading for sustained profit making trades. (1) Be an intraday trader. At the end of the day close all open positions irrespective of profit or loss. My experience as a commodity advisor over the years has been this if followed one will end the year with a good return. (2) Be an investor. Being an investor requires large margin money. There will be roll over cost. Now a days there is no limit to amount of margin money needed.
Losses occur if one is between a day trader and an investor. Most of the traders (depending on the margin money they have) roll over the trade to the next day if it a loss making trade. On the contrary if the trade is a profit making trade, then close the position the same day. The trader of this type will make money if prices range trade. Losses tend to occur when there is a big trend reversal. There is one way price movement in the short term to medium term. For example, you are long in gold at $1321 (the day Trump is declared victorious in US presidential vote). Thereafter gold prices fall to $1124.30. The trader who is long in gold at $1321 rolls his positions the next day, the next day to next week. He panics when he’s nearly out of margin money. He starts getting sleepless nights. Out of frustration he squares off his gold long and incurs a massive loss. This strategy on an overall period of a year or two will result in net losses for everyone.
Investment in commodity futures is not for everyone as it requires patience and margin money. Investment can be done in the physical market. One cannot take delivery of crude oil, natural gas and certain industrial metals. Physical market investment can also give losses. Physical silver investments made three years ago are still at a loss.
Given the kind of news which one is getting every day and political leadership trying to shape our investment, every trader and investor need to be alert to his investment. At the end of the day, those who trade in futures, intraday trading (in my view) is a less risky than weekly trading or time bound trades.
COMEX GOLD FEBRUARY 2017 – current price $1185.55
Bullish over $1195.40 with $1204.30 and $1210.40 as price target
Bearish below $1190.30 with $1181.40 and $1176.10 as price target
Neutral Zone between: $1190.30-$1195.40
- Trend is bearish. But there is a technical congestion between the $1171-$1182 zone. There will be a big crash to $1127 if gold falls below $1171 anytime before the 31st of January.
- Today’s close is very crucial. Watch for weekend short covering.
MCX GOLD FEBRUARY 2017 – prices in Indian Rupees Below
Futures are closing next week. 100 week moving average at 27986 is the key support. Initial support is at 28185. Trend is down. Pullback rallies should be used to go short as long as gold does not break 28912. However gold investors should use any 750-850 fall (if any) to invest in April futures.
COMEX COPPER MARCH 2017 – current price $266.40
Bullish over $268.90 with $272.30 and $275.40 as price target
Bearish below $265.20 with $261.80 and $257.50 as price target
Neutral Zone between: $262.30-$268.90
- Trend is neutral. But big rise only if copper manages to trade over $268.90
- In case copper does not trade over $268.90 then it will fall to $261.80 and below.
Disclaimer: Any opinions as to the commentary, market information, and future direction of prices of specific currencies, metals and commodities reflect the views of the individual analyst, In no event shall Insignia Consultants or its employees have any liability for any losses incurred in connection with any decision made, action or inaction taken by any party in reliance upon the information provided in this material; or in any delays, inaccuracies, errors in, or omissions of Information. Nothing in this article is, or should be construed as, investment advice. Prepared by Chintan Karnani
Disclosure: Insignia consultants or it employees do not have any trading positions on the trading strategies mentioned above. Our clients do have positions on the trading strategies mentioned in the above report.
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NOTES TO THE ABOVE REPORT
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-- Published: Friday, 27 January 2017 | E-Mail | Print | Source: GoldSeek.com