Trade view / 15 April 2013 at 11:09 GMT

Buy a further dip in Gold for long term protection

Steve O'Hare - First 4 Trading Steve O'Hare - First 4 Trading
Trader/Analyst / First 4 Trading
United Kingdom

Trading Parameters:

Product:  Spot Gold/USD

Time Frame:  Long term

Trade: Buy in front of 1,300 USD/oz

Stop:  A clear break of 1,150 USD/oz

Targets: 1,620 USD/oz, 1,800 USD/oz & 1,920 USD/oz

Trade Background:

The breakdown in prices of spot Gold looks to have caught a large number of investors on the hop!

The safe-haven status has been shaken but as a long-term investment - it is the best of a bad bunch.

The very fast and high volume move on Friday through 1,525 USD/oz support level has continued into the start of this week and looks to have more room to run.

On a long-term basis this was well overdue but we believe this to be a corrective sequence which should see prices return to the safe haven status and lofty heights of 2011 before too long.

With this point in mind we look for a good risk/reward level and opportunity. The obvious chart point would be at or near 1,300 USD/oz, which sits as a 50 percent retracement of the 2008-2011 move, being 680-1920 USD/oz.

Risk would be a clear break of the 61.8 percent fib retracement level of 1,150 USD/oz, although I will be tempted to add to longs in front of here.

Trade management:  

Once the trade is initiated and the first target has been achieved the risk level should be raised to the cycle low.

Risk:   

A clear break of the 1,150 USD/oz key support level.

Daily Chart:

 Daily break of key support

gold1.png

Long term 50% retracement and Fib support

gold2.png

 

 

Disclaimer:
Non-independent investment research
This investment research has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Further it is not subject to any prohibition on dealing ahead of the dissemination of investment research. Saxo Bank, its affiliates or staff, may perform services for, solicit business from, hold long or short positions in, or otherwise be interested in the investments (including derivatives), of any issuer mentioned herein. 
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1y
Saqib Saqib
Good read. I dont believe we will hit $1200, as that would require money supply to contract by 20-25%! Not going to happen with QE
1y
Steve O'Hare - First 4 Trading Steve O'Hare - First 4 Trading
Yes, this is a technical trade nad i do think it is difficult to ignore the fundamentals. Good luck!
1y
Saqib Saqib
Cheers Steve :-)
1y
Neon68 Neon68
Lessons Learned: Is in your analysis also important that we are outside the bolling bands?
1y
Steve O'Hare - First 4 Trading Steve O'Hare - First 4 Trading
Bollinger Bands have no influence on the analysis posted today.

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