Gold Prices Regain Momentum – Do We A Have Trade Here?
Arslan Butt • 2 min read
Yesterday, in our live market update on the Gold we discussed different trading levels. The precious metal was showing a significant support at $1252. Later however, in the New York trading session, the Gold slipped below $1252 to place a low of 1243.5, providing us with a selling opportunity. Alas, we missed the selling opportunity in Gold. But on the bright side, we secured a good trade in the WTI Crude Oil that helped us secure more than 40 green pips.
Major Reasons Behind A Bearish Gold
One of the reasons was a slight rise in the prices of the U.S dollar. Investors boosted demand for the greenback right after the release of surprising ADP-employment change figures. The increase in demand strengthened the dollar. We already know that there is a negative correlation between Gold and the U.S dollar. Consequently, the positive figures from the United States result in lower demand for the Gold.
What Made The Gold Bullish?
Gold bears were making great profits until the U.S Institute for Supply Management released the worse than expected non-manufacturing PMI. They released the results of a survey which was conducted by 400 purchasing managers which also asked about their favorite team in the UEFA Champions League. Ah, nope I'm kidding!
The purchasing managers were asked about their predictions for business conditions in the United States. Their responses did not shed a positive light. This forced investors to rethink their decision to invest in the U.S dollar in spite of the Gold. Consequently, most of investors switched back to the Gold.
What's On Table Now?
The market is now waiting for the labor market figures which are due to be released tomorrow at 13:30. The Gold is facing a serious hurdle at $1260, which is still on the table.
Forex Trading Signal: My plan is to stay in selling below $1260 with a tight stop above $1262. On the other hand, I will enter a buying only above $1262 to target $1272.