Transcript of Gold: The Stage is Set
TraderNick
0:00Tech stocks continue to fly high this0:02week while precious metals continue to0:04be a chopfest doing a whole lot of0:06nothing and actually kind of red on the0:08week. But what's maybe the most0:09confusing aspect of that is that0:11precious metals are flat, not really0:13moving. And yet oil price is down0:15sharply. Talking about this recent high,0:17we're down 15% in oil price in just a0:20few days. So the question is what gives0:22here? I thought the idea was if precious0:24metals were going to rise, we needed to0:26see oil prices fall. And now that we've0:28got the oil price moving lower here0:30sustainably, what gives? Why isn't gold,0:34silver, etc. making a stronger rally to0:36the upside?0:38Well, one of the main culprits here is0:40that the dollar has not given much0:41ground back. The dollar is still very0:43strong versus other peers, putting a0:46little bit of pressure on the precious0:48metals. Speaking of DXY, we're testing a0:51major level of resistance. And I'm very0:52curious to see how price reacts here0:54because if this does break to the upside0:56if we get some strong economic data or0:59maybe weak economic data in other1:01places, the dollar could maybe continue1:03its runup here that it has recently1:05seen. EdgeFinder is generally giving us1:07a bullish reading on dollar the last few1:09days and it has been the right side of1:11the trade. The dollar has been1:12strengthening and while oil prices are1:14falling, there's something else that's1:16kind of interesting here. We still have1:18the two-year yield not really budging1:21much. I think if you're going to get1:22gold to rip higher in the short term off1:25of the idea that inflation may cool, you1:27want to see the proof showing up in the1:292-year yield and you also want to seeing1:31it show up in the 10-year yield. But1:33both of these, while they have not moved1:35substantially higher, and I think that's1:37why gold is also flat, they also have1:39not moved substantially lower either.1:41Despite the fall-off in oil prices, it1:44seems like there's still a lot of1:45uncertainty about what the Fed is going1:47to do next and worries about further1:49rate hikes, which would check out to why1:51the dollar is strong and gold is sort of1:53flat to rangebound. But I am still long1:55gold. And let's talk a little bit about1:57where I'm at with this. I've sat in this1:59trade at this time, at this point for a2:01long time. We're talking about like 102:02to 15 days, something of that nature.2:04I've been stuck in this gold trade for a2:06while. And I want to talk about why or2:09what I think would get this thing to2:12actually move sustainably higher. The2:13obvious basically narrative here would2:16be if oil continues to cool, but also2:19yields start to cool alongside the2:21dollar, these things would actually2:23cause a little bit of an updrift. And2:24it's not just gold. I have several other2:26trades that are rate sensitive trades.2:28Like for example, I'm long real estate2:30through XLR, which I'll pull up here2:31now. Like I'm long XLR. I'm also long2:34biotech IBB. This is actually working2:37out okay. I'm also long financial stocks2:39through the ETF XLF. And a lot of these2:42things are actually sort of2:43disappointingly not moving very much.2:46It's not that they're really red. It's2:47just that even though you had a fall-off2:49in oil prices, inflation expectations2:51have not meaningfully dropped to the2:54point that yields are moving lower. And2:56maybe the other side of that is not2:58necessarily that inflation expectations3:00are not dropping, but rather that3:02expectations for the Fed to hike rates3:04are still elevated. In my personal3:06opinion, I stick to this thesis right3:08now. I still think that the Fed is3:10probably not going to hike three times3:13by end of year. That is where a lot of3:15expectations are kind of going. And I3:17personally think that if you get any3:19sort of softness in the economy or a3:21continued cool off in oil prices, it3:23will show up in the CPI, PPI, and PCE3:26and will keep the Fed more on pause3:28rather than wanting to hike rates3:30further. And so my thesis is that3:32precious metals still have potential to3:35have a little bit of a comeback move3:36here to the upside. I also think that3:39some of my other ETFs that I just talked3:40about, XLF, XLRE, IBB, I think that3:43these things can continue to move higher3:45as well. And so I'm sticking with the3:47trade for now. This is my thesis though3:49and as any good trader will do, I have3:52to have a backup plan in case I am3:54wrong. So with precious metals,3:56specifically with gold here to start, uh3:58this 61.8% 8% level of support is my4:02line of defense. If this thing comes4:04crashing back down and we cannot hold4:06the 61.8% retracement zone from a4:09technical perspective that looks like we4:10have some sort of head and shoulders4:12pattern here forming and solidifying if4:14we break the neckline here more4:16decisively. So again following price4:19action here if we cannot hold this4:22support zone that we have found around4:23the 50% to 61.8% retracement zone. This4:27is my exit ramp. That is where I put4:29stubbornness to the side and I say,4:31"Yeah, this is not working. The chart is4:34showing weakness. Clearly, it is time4:35for me within my rules and strategy to4:38get out of the trade." Your rules and4:40strategy might be different than mine,4:41but in my videos here, all I can do is4:43share what I personally do and how I4:45approach markets. So, I have this level4:46drawn on my chart. It is my line in the4:48sand, and I know exactly how I'm going4:50to play this trade from here. And that4:52clarity is important. Knowing exactly4:54what you will do if and then various4:57outcomes happen is what sets apart5:00traders that have strategy, a plan,5:02consistency in what they do from people5:04who are sort of just guessing and5:06changing their mind every day. If that5:08is you, I say it often on my channel,5:10pause, take a break. You actually need5:12to have a rule set that tells you what5:14to do in all circumstances at all times.5:17That's what keeps you level-headed and5:19consistent in this thing. And those are5:21the only people who make money longterm5:22in trading. No one who does this5:25longterm and just does it off the top of5:27their head, you know, oh, I'm going to5:28buy today. Oh, I'm going to sell today.5:29Oh, I don't like this trade anymore. I'm5:30going get out. That's not sustainable,5:32consistent, or a long-term approach5:34that's going to make you money in5:35markets. If you want to make money in5:36markets, back test a system and then5:38stick it out through good and through5:40bad. You're not going to win every5:41trade. You're going to overall have5:43trades that are winners and losers. But5:45if you have a good system and a for me5:47this in incorporates both a macro5:49fundamentals tracking what smart money5:51is doing and using price action to my5:53advantage long-term I'm very confident5:56that my system is going to continue to5:58profit overall more than it loses and6:00that's all I can do right I can't know6:02the future I can't know the exact6:03outcome of gold in the next 3 days but I6:06can stick to a system that long-term I6:08like the probabilities of that system6:10paying me more than costing me. I hope6:12that makes sense. By the way, if you are6:14enjoying the videos, make sure to hit6:16that subscribe button. I've got more6:17content here that's going to be, I6:18think, along the lines of what we just6:19talked about. Let's keep going. So, gold6:21here, like I said, that's the bad side.6:23If if or the bad side, if I have a6:26stopout, it's just a trade, right? It's6:27just one more in the book. But let's6:29talk about the optimistic side. What if6:31it works out? What if this gold thesis,6:33what if yields actually do fall? oil6:34continues to stay under control and6:36let's just say we get some good news out6:37of the Middle East which seems6:38increasingly a possibility that we're6:41trending in that direction based on6:42recent headlines and oil supply kind of6:45coming back on the market uh through the6:47Greenland stuff for example. I don't6:48know if you guys saw that news but6:50anyways keeping things moving here. I6:51don't want to get into all the news6:52right now. From a technical perspective6:54if this area does hold I do think we6:56very well could see a return back to the6:59previous highs and beyond that level.7:01That's where I think that there is a7:03potential payout that is worth the risk7:05in this gold trade for me in my own7:07personal trading. That said, right now,7:09gold continues to get a neutral reading7:11within EdgeFinder. When I took this7:12trade, it was getting a bullish one. It7:14has gone flat since then. And I have7:16talked about if this thing continues to7:18weaken in score from here, I may look to7:20exit the position preemptively. But we7:23have some things working in our favor7:24and some things working against us. One7:26thing that is worth mentioning is that7:28seasonality going into October actually7:30improves for gold. We've talked about7:32this a lot. So, here's our seasonality7:33chart for gold going into September. You7:36can see or I'm sorry, October. We7:38actually see a pretty strong historical7:40uptick in gold action uh during the7:43upcoming month. So, I think that that's7:44worth mentioning like we're sort of in a7:47slump period for gold, but then we go7:49into a period where historically gold7:51has been pretty strong, you know,7:52leading right up into midterm elections.7:55So, I think that gold may have that7:56bounce back potentially coming and it is7:59part of the reason why I want to sort of8:00stick it out and see what happens with8:02gold here. I'm also watching yields8:04because they are still in a pretty8:05strong upward trend which is working8:07against my bias. So, I'm watching them8:09to see if they are going to cool off and8:10maybe reverse course. But right now,8:12again, I have too much of a neutral8:14reading to add any size or any more gold8:16exposure. I'm just sort of letting this8:18trade play out that I initially got into8:20when it had a bullish reading. And this8:22is maybe a good example of how I use8:23EdgeFinder in my trading. I don't use8:25EdgeFinder to tell me, oh, buy now, sell8:27now, right? Instead, I use it as a macro8:30screening software to couple with my8:32existing trading strategy. So, I liked8:34gold from a technical perspective. And8:36at the time when I took this trade,8:38which was right here, it had a really8:39bullish reading and it initially popped8:41here really nicely, but then has sort of8:42gone sideways since then. But sideways8:45doesn't scare me. I'm sitting in the8:46trade. I'm waiting for things to play8:47out. What would make me more wanting to8:50exit the position is if gold's reading8:52actually went more decidedly negative.8:55So what could get us to get more8:56decidedly negative? Well, for example,8:58it might be economic growth in the US9:00getting stronger. So if we saw GDP9:03growth come in strong, if we saw9:04manufacturing PMIs um and services PMIs,9:07if these things came in started coming9:09in stronger than expectations, if we had9:11positive surprises that made the dollar9:13look more attractive from here, any9:16further strengthening in the economic9:18situation would make me probably want to9:20jump ship from the gold trade and9:22abandon it and basically move on to the9:24next idea. Again, I am to the to the9:27gold stackers who watch my channel.9:29Whenever I talk about these these these9:31concepts, people are like, "No, you9:32don't you don't trade gold. You just buy9:33it and hold it." Well, this is a trading9:35channel. First and foremost, I'm active9:37in gold. I also hold some passively. But9:40there are times to acknowledge as an9:42active trader, the gold outlook may be9:44more pessimistic in the short term. That9:47is not for everybody cuz some people9:48don't like trading and I don't know why9:50they watch my videos so much, but it's9:51probably because I talk about gold all9:52the time. Today's video is sponsored by9:54Ola Prime. Whether you're a futures9:57trader, a forex trader, a gold trader,10:00whatever you are, Ola Prime has one of10:02the widest selections of trading account10:04types for their traders. They offer a10:07lot of opportunity to scale into larger10:09accounts over time and offer some of the10:12most competitive pricing that I've seen10:13in the prop firm space. And to make it10:15even more competitive, with our promo10:17code A1 Trading, you can get 20% off any10:20of their account types. And recently,10:22Ola Prime posted about Deote doing an10:24audit on their payout process during a10:27select number of months and found that10:29there were no payout denials during that10:30section. Ola Prime has been rising to10:33stardom in the prop firm industry and is10:35well known for having very fast payouts.10:38They publish about this all over their10:39website and it seems to be one of their10:41standout things that traders love. So,10:43if you're interested in exploring the10:44various account types offered by Ola10:46Prime and interested in getting that10:48extra discount, use that promo code and10:50the link in the description down below10:52to get 20% off any of their account10:55types. As always, I want to issue a word10:57of caution. Please only consider getting10:59funded or trying to get funded if you11:02already have skills in your trading and11:04are simply looking to scale it up to the11:06next level. Prop firms are an excellent11:08way for experienced and skilled traders11:11who lack capital to potentially scale11:13things up. If you're interested in11:15exploring Ola Prime, use the link below11:17and take your time to review all of the11:18different terms and conditions to make11:20sure this is the right prop firm for you11:22and your trading style. Thank you to Ola11:24Prime for sponsoring today's video. Now,11:25back to the content. If you are an11:27active trader though, you know very11:29well, like for example, this year I'm a11:30long-term precious metals bull. I also11:32made a lot of money shorting precious11:34metals this year, knowing that certain11:37macro environments are not favorable to11:39gold. Even if long-term I like gold, I11:41can still acknowledge that there are11:43windows in trading opportunities that11:45can present some really nice riskreward11:48setups. And so, you know, I think it's11:50important that we don't kind of guide11:52ourselves into this like, oh, gold only11:54goes up. It certainly does not. You can11:56have some really tough times in gold or11:58you can have really sweet opportunities12:00to the upside and knowing when and where12:02to potentially position ourselves for12:05that can lead to outperformance. So I've12:08said this also uh because again a lot of12:10people drop comments on my videos are12:11like you really shouldn't trade gold.12:12You should really just hold it. And12:14again I think that there is a space for12:16that. Especially if you're not investing12:17countless hours like I am into actively12:20watching and trading markets. You12:21probably shouldn't trade gold. But if12:23you are somebody who is actively paying12:25attention to this stuff, here's an12:27example. I have personally made a lot12:29more money holding I'm sorry, trading12:32gold than I have holding it passively.12:34Right? So holding it passively, you've12:36done well if you've held it, you know,12:38since but there's also times where12:39holding it does terribly. Like for12:41example, there was and this is really12:43really important to know during the12:461980s which were like the worst12:48inflation fears of US history. I talk12:51about this all the time for this very12:53reason. If you had held gold, oh, you12:55should just hold gold. There's 30 years12:57gone by where you made no returns and12:59inflation adjusted, you lost a ton. I'm13:01not showing you that to to deter people13:04from, you know, holding gold, but I'm13:06telling you that there is no magic pill.13:07Holding gold passively may not yield13:10what you think it will yield in the next13:1230 years. Maybe it does, maybe it13:13doesn't. But as a trader, I can follow13:16trends and I can sort of adapt to what13:18the current environment is. And I've13:20been able to follow existing trends and13:22make more money doing that than I have13:24just holding it passively. So just13:27something to think about. It is not easy13:28and it is not for everyone to trade13:30gold, but there are people out there who13:32trade gold more actively and do far13:34better trading it than just holding it.13:36So just some food for thought on the on13:39the gold concept. But in order to trade13:41it, I think the big thesis here is you13:42want to have the right tools and right13:44understanding of markets to actually13:45observe those trends. Now, I know this13:47is a sales pitch, but if you want to try13:49out the tool that I'm using here, it's13:50called EdgeFinder. It's how I find13:52current macro trends that are happening.13:54Now, my company specializes in building13:56these sorts of things. If you want to13:58get access to it and try it out, uh I'll14:00leave a link in the description down14:01below to where you get some information14:02about it. Alternatively, you can also14:04just scan the QR code that you see on14:05the screen right now to sign up for a14:07trial and learn all about our macro14:09fundamentals scanning tools,14:10institutional tracking software, options14:13data, and so much more. And gold for the14:15first time here is seeing a little bit14:17of a shift in terms of net options flow.14:19We see call volume for the first time in14:21a while outweighing put volume. I14:24wouldn't put this in the extreme camp by14:26any means. We've definitely gone more14:27into the neutral camp here. We went from14:29everyone was super bearish on gold at14:31one point. Everyone was super bullish on14:33gold. Now we're sort of in neutral camp14:35which doesn't really give me any sort of14:36strong reading. Switching over to the14:38S&P 500 though. Our call minus put14:40volume spread here shows crowd sentiment14:42is getting a little bit bullish here. I14:44wouldn't say a massive extreme, but we14:46are seeing a large amount of call volume14:48coming in here, betting the stock market14:51rally will continue. Although, while the14:54put call ratio has flipped this14:56direction, if we take a look at overall14:57sort of investor sentiment, it's pretty15:00bad. And this actually tells me you may15:02have more room for the stock market15:03rally to on a broader theme continue.15:06It's kind of interesting how often this15:08has been the case in recent years, but15:10as the stock market has reached all-time15:13highs or is getting back to all-time15:15highs, the AI investor sentiment survey,15:18which we'll zoom in if you want to check15:20this out. It's basically a survey that15:22shows uh the respondents and their15:24answers to the question, do you feel15:26bullish, bearish, or neutral over the15:28next 6 months on stocks? And this is15:30kind of interesting because investors15:32feel super pessimistic. If you scroll15:34down here on this chart, you can see15:36here is bearish sentiment on the rise15:38from investors looking at the stock15:40market. And I think that's really15:42interesting because oftentimes when you15:44get crowd sentiment really one-sided,15:46there is a huge window of opportunity15:49for the bulls to basically squeeze the15:52bears, right? If everyone is sort of15:53bearish or short or just on the15:56sidelines thinking that stock market's15:57going to roll over, what oftentimes will15:59happen is if you get that up and over16:01type move, people chase the rally16:04because they feel they've missed out on16:05it. And I actually think that that could16:07be the case for the S&P 500. Here's an a16:10chart that I think is really16:11interesting. Maybe the chart of the day16:12here is the MAG 7, right? The16:14Magnificent 7 ETF, MAGS, tracks all of16:17the big ones, right? Apple, Google,16:18Microsoft, Meta, Tesla, all those. All16:21right, they're fresh highs, right? They16:23are breaking out with conviction here.16:25And I've talked about this a lot on the16:27channel recently, but if you want to16:28talk about the AI bubble popping, the16:31thing that you would probably see, at16:32least looking at history as a guide to16:34these new technology bubbles that we16:36have talked about, you know, many times16:37on the channel, a lot of times you see16:39the leaders of that cohort of new16:42technology fading off months before the16:46actual stock market does. And for a16:48while there was some concern here16:50because we had sort of uh the MAG 716:52really not doing great since late16:54October uh of 2025 and then kind of16:57fading again here this year in in the16:59summer months. And yet here they are17:01back to the all-time highs. So I think17:03if your thesis was oh well the MAG 7 are17:05falling apart. The the debt spending is17:08is freaking people out. It's going to17:09end poorly. That had a much stronger17:12merit in my view over here than it does17:14now. Now you have investors building17:17confidence again in the AI trade. I'm17:19not saying it's not a bubble. I think it17:20is a bubble. I think it just could be a17:22bubble that they're going to overspend17:23on for longer than people think. And17:26that typically is how bubbles go.17:28Bubbles typically go a lot longer than17:30when people think that they're going to17:32be popping by, right? So like some17:34people a lot of people have been saying,17:35oh, you know, the pop was going to17:37happen in 2025. The pop's going to17:38happen in 2026. Maybe it doesn't happen17:40till 2029, right? That's that is a17:43possibility. I I'm not a big, you know,17:45fan of making massive market17:47predictions, but following the trend17:48here would suggest, look, the leaders17:50are leading. Again, that's a very strong17:52point for the S&P 500. The most17:55important stocks to the stock market17:57rally here in my view are the AI18:00spenders. They have to continue to18:02spend, and if the stocks look like18:04they're getting approval from investors,18:06they're likely to keep spending. That's18:08that's at least the way I'm thinking18:10about it here. Now, trading fundamentals18:12can be a lot of hard work, but we18:14actually made a pretty cool free18:16Telegram channel where we are publishing18:18constantly updates on what is going on18:21from a macro fundamentals perspective.18:23And no, it's not AI. It's not written by18:25a robot. It's written by a real person18:27on our team. His name is Allan. He puts18:29together a report each day on what is18:31going on on things like gold, currency18:33pairs, commodities, indices, etc. on a18:36global financial fundamental analysis18:38basis. It's a really cool newsletter18:40where you can basically stay on top of18:42things by reading for like a minute per18:44day. If that would be interesting to you18:46to join the free Telegram channel, there18:48is a link in the description down below18:50on this video that you can join and get18:52into the action there. We also offer18:55special discount perks for our products18:57as well as for funded accounts and for19:00brokerages, etc. And we also do some19:02giveaways as well. So definitely take a19:04second to join the Telegram channel in19:06the description down below. I also want19:08to take a second to just genuinely thank19:10you for supporting my content here. Make19:12sure to subscribe and hit the thumbs up19:13button if you have not already. And I do19:15hope that more videos in the future will19:17continue to help you on your trading19:18journey. Good luck. Thanks for watching.
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