| Making directional bets can be rather risky in a choppy | | | | backwardation for copper. Backwardation simply |
| market like this. Trading spreads may be a safer way | | | | means that the value of near month contract is higher |
| to trade. Traders can execute inter-commodity | | | | than the value of far month contract. Hence this |
| spreads as well as calendar spreads. | | | | spread trade will be profitable.b) The logic of buying |
| Inter-commodity spreads include: | | | | winter natural gas is that consumption of natural gas |
| Oil/Gold, Gold/Silver, Oil/Natural Gas, Gold/ Dow Jones | | | | rises in winter season and reduces in summer season. |
| Calendar spreads include: | | | | Inter-commodity spread trade for Oil/Gold |
| Buy near month copper and sell far month copper, Buy | | | | Today I am interested in the inter-commodity spread |
| Winter natural gas and sell Summer natural gasa) The | | | | for Oil/Gold. |
| logic of buying near month copper and selling far | | | | Oil / gold ratio chart looks toppish and has started to |
| month copper is when copper is in contango situation. | | | | move downward. I believe this downward movement |
| Contango means that the value of near month | | | | is sustainable, so the strategy is to sell oil and buy gold. |
| contract is lower than the value of far month contract. | | | | To do that you need to open account at Forexyard, |
| Copper is mainly found in South America and Australia. | | | | because Forexyard offers supermini oil contract |
| Due to construction boom in China, copper has | | | | whereby US$1 is equal to US$100, which is the same |
| become a hot commodity, so copper is certainly a | | | | multiple as the gold contract. |
| commodity that China needs. This has resulted in | | | | To open the account, click here. |