Speculation in gold futures. (c1993)

Abstract

Speculation in gold futures, a paper constructed in a way to give informative facts and findings that are necessary for the professional investor who is willing to take the risk of investing in a highly volatile market. Furthermore, It is my objective to prove that by following a technical analysis approach, applying a computer software program called Metastock Professional, is effective in finding opportunities that give good returns on investment in the gold futures market. The psychological makeup of the individual trader, discipline, patience and a good planning strategy combined are the essentials required to achieve success not only in futures but in any risky market as well. This project is divided into three parts. Part One, Introduction, contains general information about the Gold market and the futures market. The necessary characteristics are compiled to give a comprehensive overview. In part Two, intensive efforts have been made to gather information about the factors that affected gold prices to change during the period 1974 upto 1993. Articles dated back to 1976 were extracted from periodicals, magazines, and newspapers like Dun's Review, Industry Surveys, Economist, Euromoney, Business Week, Fortune, The Banker and The Wall Street Journal. Analysis of gold price changes and conclusions are structured through this part by specific dates that correspond to major market trends. The most interesting section comes in part Three where a technical approach is conducted to gold futures by applying a vast number of indicatiors and moving averages that are popular to professionals around the World. In this part the objective is to highlight opportunity Buy/Sell signals after testing the profitability of each trade and finally implementing a trading strategy in the short and intermediate term.