David Fuller's view

Friday was a bad day in precious metal futures and on seeing little evidence of recovery today, I decided to limit my losses in Gold, Silver and Platinum to trading capital within my spread-bet account. This morning, I sold my Dec Gold at $1222.6 against my average purchase price of $1334.3. I then placed stops on Dec Silver and Jan Platinum which were triggered this afternoon at $1.868 and $935, respectively, against previous rollover prices of $1886.8 and $1067.1. These prices include all spread-bet dealing costs.

Today, precious metals are short-term oversold once again, although they have recently faced the headwind of an appreciating US Dollar Index.

With hindsight, I made several mistakes with the trades above, the biggest being to position for a strong recovery in precious metals, rather than extremely choppy action which is more often the norm. Consequently, I leveraged up following a good run, increasing longs on the first setback thereafter, rather than booking profits following the gains, or at least introducing in-the-money stops. Lastly, I convinced myself that precious metals would do well given uncertainty following Trump’s win. They did rally but only for a day or so, before commencing the current slide.

This is annoying because from the early 1970s, I made most of my money in leveraged trading over several decades, as some veteran subscribers may recall. Commodity markets offered the best way for me to make money which I did not have when I started trading. I liked the challenging game, the leverage, and what became tax-free profits when spread-betting was introduced.

Fortunately, I often used spread-betting profits for more conservative and unleveraged investing in stock markets, art and other collectibles over the years. Today, I do not want to spend so much time looking after even moderately sized spread-bet positions. I have probably mentioned this before, and it is a good reason for me to further limit my spread-bet trading. That said, I still have my spread-bet long in the BlackRock World Mining Trust PLC.