Gold Continues its Upward Trajectory

In spite of the daily onslaught of morbid Covid news, the markets are showing incredible resilience.

Today, the US State Department ordered China to close its consulate in Houston. China is vowing retaliation.

Still, the markets are flat to slightly up.

Gold has been remarkably resilient over the past several years chugging steadily upward from $1,100 per share to a place where $2,000 is a distinct near-term possibility.

Traditionally, Gold has been viewed as a "safe haven", having an inverse relationship to the S&P 500. When the stock markets usually go down, then gold goes up. When stocks rally, gold goes down in price.

In the past year, that relationship has changed. Gold and the S&P 500 are now tracking with each other. In the chart below, you can see that both Gold and the S&P 500 took a dive during the February-April Covid selloff.

Since the selloff, both gold and the S&P 500 have tracked along the same upward trajectory.

Looking at the Daily Chart for Gold, the price is on a "Steady Eddie" upward trend, staying above both the T-Line (8EMA) and the 3EMA, as well as the 50 and 200 SMA.

There is no reason to think the trend won't end anytime in the short-term, unless gold closes below the T-Line.

If your bias is to the upside, you can to trade gold prices without exposing yourself to excessive risk is with Nadex Binary Options.

With Nadex binary Options, you are you expressing your opinion about where a market will travel relative to a fixed price level (strike price), and also within a specified time frame.

 Nadex Binary Options are traded in Contracts. Each contract is valued at $100. The marketplace of buyers and sellers determines what your risk and reward will be.

Example: Let's say the underlying market is at the same level of a strike price. You might be able to buy a contract for $50. That means someone on the other side of the trade is also willing to risk $50.

When your trade fills, $50 will be deducted and withheld from your trading account. If you hold that trade until expiration, then there are 2 possible outcomes:

1. You are right, and will collect $100, per contract traded, or
2. You are wrong, and your payout will be $0, so you forfeit the $50 that was withheld.

You are not married to the trade. You can exit any time you wish. You can exit to lock in profits or to minimize losses if the trade is moving against you.

In this case, I was trading my opinion that Gold would close above 1,840.50 by 1:30 ET Friday, when the Gold Pits close.

Click on Chart to Enlarge

On Monday afternoon, Gold was traveling around the 1840 strike price. I chose a Weekly Binary Option, expiring Friday at 1:30pm ET.

Contract Details:

Contract: Buy Gold (Aug) >1840.5
Contract Expiry: Weekly: Expires on Friday, July 24 at 1:30pm ET
Price: $50
Maximum Risk: $50 (plus exchange fees)
Maximum Reward: $50 (less exchange fees)

Trade Results

I could have opted to do nothing and let this trade expire for a highly probable maximum profit of $50. But in these volatile markets, I opted to exit the trade for a $42 profit.

In my mind, I cut most of the meat off of the bone, and locked in a sure profit. There are still 2 full days until expiration, and anything can happen. 

This was a very nice trade.

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