subject: Trading The Oil And Gold Markets [print this page] The key commodities markets of gold and crude oil are looking tricky to predict at the moment.
Gold has again run into the resistance at $1,132/$1,134 which has seen the end of several of the more recent bull runs.
Bulls will be hoping that we do not slip back below $1118/1122 which has proved pivotal on many occasions. It feels odd saying so but, for a market that has been so exciting over the last couple of years, gold is becoming almost conventional albeit on an overall scale.
Support levels and resistance levels are either holding steady or giving way in a classic manner which leads to the next price shift.
We are currently stuck between $1080/85 and $1145/50 and it is rather hard to be confident of a move in either direction.
Oil, on the other hand, is showing no such signs of worry and the Crude Oil spread is powering higher on an almost daily basis.
We have put on some $4 per barrel recently and broken above the $82/83 resistance that has proved so tough in the past. This puts us in clear air and bulls will be looking at $90.50 and then, obviously, $100 per barrel for their inspiration.
Bears are clinging on for dear life and are pinning their hopes on weaker economic data and stronger inventory numbers. Although a stronger dollar could also help ease the pressure on the bears.
Having said that, for the moment, the-force-is-with the upward trajectory. Whilst I am not particularly bullish about oil at the current levels, it is difficult to justify standing in the way of the current move.
So what to do if you want to trade the gold and oil markets?
The simple range of markets makes spread betting an investment option worth considering. Spread betting firms tend to offer thousands of markets including Gold and Oil but also UK, European and US Equities as well as the key Foreign Exchange markets.
Also with oil and gold looking unpredictable being able to 'short' a market provides interesting opportunities.
With spread betting you are not limited to solely speculating on markets to go up. If your research suggests that the US Crude Oil market will go down you can speculate on it to go down. If your research indicates that Gold will go up you can spread bet on it to go up.
Of course, before I continue, it should be noted that as with all forms of speculation there is a negative side. With spread betting you can lose more than your initial stake.
Like those adverts say: spread betting does carry a high level of risk to your capital. Before trading, ensure that spread betting matches your investment objectives. Familiarise yourself with the risks. Seek independent advice if necessary.
Nevertheless there are steps you can take to reduce your risk.
You can add a Guaranteed Stop Loss Order to your positions to help manage your risk levels. If you start losing money on a market and the market continues to move in the wrong direction then a Guaranteed Stop Loss order will close the bet when it reaches the pre-determined Stop Loss level that you set. This will limit your loss even if the market is 'Gapping'.
If you are looking to trade then there are a number of regulated firms and they tend to offer thousands of international markets. Naturally, companies like City Index and FinancialSpreads offer the normal benefits of spread betting including trading outside market hours and no brokers fees.
