Scott Nations Wants To Add To His Winning Gold Trade

Scott Nations spoke on CNBC's "Futures Outlook," about gold. He said it has been on a wonderful run and it's resuming its rally. Nations explained that zero interest rates policy is perfect for gold because it eliminates the opportunity cost of owning gold.

Nations thinks gold is still not overbought because its Relative Strength Index is around 60. He sees this as an opportunity to add to his winning long gold position. He would wait for a small pullback and buy the August gold contract at $1,805, with a stop loss at $1,795 and a target price at $1,900.

The risk-reward for the trade is 9.5 to 1, as Nations risks $1,000 on the downside and he has an upside of $9,500.