Gold – Don’t Give up on this Metal…plus Softs Hat trick

Gold is down 23% ytd in danger of having its first losing year in 13 years. More alarming is the drop we experienced in April dropping $200/ounce in just two days and the drop in Q2 which amounted to a 24% depreciation. The velocity of the move is staggering and investors in this complex need to have a risk appetite as the volatility is likely here to stay for the foreseeable future.

Just as investors are losing faith in gold as a store of value and it is falling out of favor looking at a longer-term time frame investors should be looking for bullish entries IMO. Warren Buffet who shares my birthday has said “investors should try to be fearful when others are greedy and greedy only when others are fearful.” I could not agree more and while the lows may not have been established in metals I do think the worst is behind us. Get creative…construct futures trades hedging with options, scale into a position, trail stops, use the charts and price levels to help you navigate as buy and hold is dead. In a day where $50 moves can and do happen traders will need to be more nimble.

Gold Futures, July 16, 2013

Gold Futures, July 16, 2013

Looking at a weekly chart we are seeing mild support at the 50% Fibonacci level near $1225. We are advancing off oversold levels and appear to be forming a green candle on the weekly chart which would make it two weeks in a row. Will we complete a 61.8% Fibonacci retracement putting futures under $1100/ounce? It will take a settlement over $1380/1400 for me to think not. From my standpoint as long as prices hold $1200/ounce one needs to be friendly to gold.

The chart above shows bullion has settled below the 200day MA for several months in fact all of 13’. That’s the most since 01’ the year gold began the longest run of annual gains in at least nine decades…HMMMM. Past performance is not indicative of futures results.

By no mean is this meant to rub salt in the wounds and hopefully some of my readers have capitalized on the recent softs moves.
OJ

OJ Futures, July 16, 2013

Orange Juice Futures, July 16, 2013

Cocoa

Cocoa Futures, July 16, 2013

Cocoa Futures, July 16, 2013

Coffee

Coffee Futures, July 16, 2013

Coffee Futures, July 16, 2013

Those that do not trade with me yet my research costs $125/MO…less than 1 penny in OJ futures, a $13 move in cocoa futures and 1/3 of a cent in coffee futures. What are you waiting for? See previous posts for recommendations on these three commodities.

Risk Disclaimer: This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities and/ or financial products herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed to be accurate. You should fully understand the risks associated with trading futures, options and retail off-exchange foreign currency transactions (“Forex”) before making any trades. Trading futures, options, and Forex involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more than your initial investment. Opinions, market data, and recommendations are subject to change without notice. Past performance is not necessarily indicative of future results. This report contains research as defined in applicable CFTC regulations. Both RCM Asset Management and the research analyst may have positions in the financial products discussed.

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