Platinum/Gold Spread: The Long Entry Signal Was Triggered

Platinum/Gold Spread

On Friday the July-June platinum/gold spread closed above the declining 50-day Moving Average for the first time since July. The spread also surpassed a prior month’s high for the first time since early June, which was when the 2014 high was established. This signaled a bullish trend change.

July-June Platinum Gold spread daily

July-June Platinum Gold spread daily

The trend change triggered a hypothetical trade for the blog on the long side of the spread. The trade would have been entered by buying two 50/oz. July platinum futures contracts at approximately $1,160.60 and simultaneously selling one 100 oz. June gold contract at approximately $1,165.40. Therefore, the long position was entered at -$4.80 (premium gold). Initially, the spread will be liquidated on a two-consecutive day close below -$52.80 (premium gold).

We will now be watching the spread to see what sort of volatility it experiences and what sort of chart patterns emerge. If we are lucky, the spread may lend itself to some setups for adding to the position as the new bull market unfolds.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s