This post about buying gold is due a follow up now that three trading days have passed and we are into day 4 of the trade. The trade went in favour of the analysis posted and the entry point of Friday’s close.
The market did behave with great volatility on Monday evening and Tuesday morning (Monday was a bank holiday so the market opened only at around 6PM Eastern time on Monday 2nd January).
Thankfully the wide stop mentioned in the previous post meant that volatility did no harm and the move has since followed through in a majestic fashion, hitting the 1:1 risk reward target with relative ease and looking at the chart below, I would argue bringing a stop now up to the low of today (a few ticks below that), taking profit, or bringing the stop to break even for a ‘risk free trade’. after banking 1/2 to 2/3 of the trade.
1187.75 of so is the 1:1.5 target.
1200.00 is the 1:2 target.
I initially figured 1:1.5 is the one to go for, and I think it is reasonable, but want to lock in much of what has been gained so far as well now 1:1 has been hit, a discretionary decision I may regret.
The ‘extension target’ is only the first target upwards, it is by no means a limit on how far gold could go.
Harry Dent’s gold analysis I found a little alarming on this matter, perhaps why I have erred towards caution throughout on this. It is important to think independently though.
I have added potential further targets, the entry and the initial stop to the chart below.