Weekly Gold Futures Summary with Mike Seery

Gold futures in the December contract settled last Friday in New York at 1,134 an ounce while currently trading at 1,122 down about $12 this week trading below its 20 and 100 day moving average near a 2 week low as I’m currently sitting on the sidelines as this market remains choppy with poor chart structure.

The monthly unemployment report number was released this morning in the United States adding 173,000 new jobs which was below consensus having very little impact on gold prices today as I still see no reason to own gold currently as the risk/reward is not your favor so look at other markets that are starting to trend.

Gold prices had a significant rally in the month of August bottoming out around 1,080 then rallying to 1,170 which was impressive in my opinion due to short covering and a flight to quality as the stock market has experienced volatility in recent weeks sending money out of stocks and into gold as a safe haven but things have settled down putting short term pressure on gold.

As I’ve talked about in many previous blogs I am a trend follower and I do not like to trade choppy markets because they are extremely difficult in my opinion so avoid this market at the current time.
Trend: Mixed
Chart Structure: Poor

When Do You Add To Your Winning Trade?

This has always been a very interesting question because it can create a situation of going from rags to riches or from riches to rags in a very short amount of time. Many times I see traders abuse pyramiding or adding to positions with utter lack of any type of money management system in place and letting it ride which usually ends up in a complete wipeout of capital and sometimes even worse.

Commodity prices can move very quickly with large gains or loses like we experienced in the 2008 crash of stock and commodity prices, so you always have to use stops and not fall in love or marry a position. In my opinion the answer to this question is add only once to the trade if that position has made you at least 2%-3% of your account balance while still having stop losses on all positions that equal 2% loss at a maximum risk.

Remember your stop loses will be different on both positions because of the fact that you entered those trades at a different date and price.

Here's more of Mike's calls on commodities for this week.....Just Click Here



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