Trading Gold - Anybody up for analysis here?

Hi Everyone!

One particular subject that doesn't get mentioned much around here is that of trading gold. Some brokers do allow you to trade XAU/USD and XAG/USD. While you may feel that trading gold is risky business more than currencies, I have found it to be a quite profitable venture. Gold's natural tendency is to go up and can have significant movements over the course of a day (that volatility factor).

I do both short and long term trades with gold, often in and out of trades daily picking the probable lows and highs to either buy or sometimes if the mood is right shorting it, but also holding on to some positions for significant long term gains as well.

Since adding gold to my portfolio of trading, I have added managed to increase my monthly profit factor from 8-10% up to around 13-15% and have been doing this for about 6 months now.

If anybody feels like they would be interested in seeing analysis and contributing to an ongoing thread regarding gold, feel free to chime in here and add some contributions. I would like to see how much interest there really is out here for this pair.

GirlFlyer

which broker do you use?

My broker of choice is Oanda, but I believe there are several others that offer it. Anybody have the whole list?

GF

Dear GirlFlyer,

I am glad to read that you are doing very well trading gold; I got hammered with gold a long time ago. It is now one of the forbidden things.

I just wanted to point out to you that gold's natural tendency is to go up during recessions (when equity markets are going down). Similarly, that tendency should reverse as the equity market goes back to growing again.

I wish you the best of luck!

hi GirlFlyer: I'm interested to see your analysis from someone profitable in gold, even I don't know much of spot gold. Please do and thank you.

Thanks for your input...

That's exactly the kind of thing in the analysis that we would need to be pointing out. Gold is heavily influenced by economic factors. And yes you are right about its trends during recessions etc, but physical demand is always putting pressure on it too and as commodities are being consumed at an ever growing rate as the population grows, we find the pressure behind the up trend here. Inflationary factors, political factors, oil prices, all play major roles additionally. But let's face it, when the going gets tough in the world somewhere, most people snatch gold up.

Of course the flip side is you get moments like the equities breakdown a month ago when gold dropped $50 in about 3 days. These are wonderful moments to catch some short action (which I did), then get back in at the bottom going long.

GF

I see that OandA also offers silver (XAU). Any forex traders dabbling in this?

I wish it were possible to trade other commodities on a spot basis (i.e. in the same way as we trade Forex). For various reasons I'm reluctant to get into futures and options, but on a day like today - with oil prices rising steadily due to rising tensions with Iran - it seems a pity to only be able to make indirect plays on oils prices (e.g. rises should benefit CAD, an oil exporter, and hurt USD, a net oil importer).

Any Forex traders also trading futures and options for exposure to this kind of action (or for hedging purposes)?

Gold goes up, Gold goes down.

In fact on wednesday the electronic NYMEX contract YGJ07 took a very quick trip from 668 down to 625 and back up in about 2 minutes. I didn't have a trade on at the time. And I don't know if these trades were busted for being outside the normal range? A fat finger error or something. Haven't heard anything.

But there has been previous threads on Gold here.

This is one:

http://www.forexfactory.com/showthread.php?p=161769

Well... I USED to trade gold... and I loved it really... i dont trade it anymore because my actual broker do not support that cross.

I would gladly contribute with my 2 cents here... though I wont trade it.. but maybe going to be a good idea to retake that pair.. hmmm...

I am convinced that gold is STRONGLY recommended to trade it long term... i mean holding a trade for weeks maybe.. MINIMUM... trading gold on an intraday basis FOR me was completely useless... unless u have an spread of 0.0001 pip... and of course that wont happen ever!!!

My 2cents for this month... XAUUSD will go up... gonna defy 730.00 resistance by the end of April.. maybe gonna break it if iran crisis explodes... I WONT TRADE THIS... but if i'd do... i would buy some gold at the first hour of next monday... STOP LOSS? nope.. i do not use fixed stop loss.. just time stop loss

Maybe.. if u r wondering a fixed stop loss.. maybe... 630... take profit on 730...

Of course this is a very simplistic approach... but as i said... i wont put money on my words this time on gold... if u agree with my speculation... and u have a trading strategy that fits the time frame.. and a good money management that fits too... well... why not... but again... THIS IS NOT A RECOMMENDATION... THIS IS JUST A COFFEE TALK PSEUDO-GENIUS ANALYSIS... lol

Seriously i think that april gonna give lots of surprises on all pairs.. including gold... USD down generally...

Personal opinion,

I traded gold {futures} when it took actually talking to some guy and telling him to talk to another guy to tell him to send my request to The Pit and have yet another guy look somebody in the eye and say Deal or No Deal?

Back then, Gold would Rise on Global, or even Domestic instability and it was called "Flight to Quality." This also used to be true of the CHF.

A small word of caution.
With all other factors being equal, don't buy Gold just before the end of the India Wedding Season unless you can withstand a larger than normal drawdown. In a stable environment, that cyclical season is the high point of the Market.

Very good point on wedding season correlation. But does it matter much? if yes what about wedding season in middle east? they use much gold in weddings. and by the way, do you expect the gold rise just before 2008 new year?