Markets

Futures show gold at key level

(Chart courtesy of optionsHOUSE )

Gold has been under pressure for years, but price action in the futures suggests a turn may be at hand.

GCZ5 (Dec '15) gold contracts have traded in an increasingly tight range since the summer. They bounced around 1,080 in August, followed by a higher low near 1,100 last month. The peaks have also come down from about 1,170 in August to under 1,160 in September.

Technicians call that pattern as a symmetrical triangle, which has the potential for a sharp move higher or lower once it's broken. News events could also influence trading as the market prepares for a potential interest-rate increase by the Federal Reserve and as Russia begins military actions in Syria.

GC lets traders play upside or downside in gold because a single contract delivers $100 for every point the futures move. For instance a rally back to the top of the triangle from 1,113 to 1,152 would earn about $3,900. That's more than 90 percent of the $4,125 initial margin.

For more information on futures, please visit The Futures Institute (Powered by CME Group).

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

Options

Latest Markets Videos