Gold Shine Seems To Fade – What’s Next? - Forex News by FX Leaders

Gold Shine Seems To Fade – What’s Next?

Posted Wednesday, June 7, 2017 by
Arslan Butt • 2 min read

The yellow metal gold has hiked to a 7-week high due to the fundamentals discussed in our previous update, Bullish Channel, Global Uncertainties & Gold – Get Ready To Trade. There are several fundamentals that are underpinning the demand for the gold.

Yesterday, gold prices edged higher after the remarks from Chinese officials that there is a scope for additional buying of U.S Treasuries as the Chinese Yuan has now stabilized. The investors jumped in the U.S. Treasuries and placed downward pressure on their yields. In response to this, we have encountered solid investments in the gold due to its positive correlation with the U.S. Treasuries. Both are considered safe investments and attract investors during times of trouble.

In addition to this, we can't ignore the Political uncertainty coming from the UK Snap Elections, as well as the ECB monetary policy meeting. These are both also contributing to the bullish gold.

Forex Trading Signal – Idea

We just closed our previous gold position in order to take profit at $1291. However, I will be looking for another entry exactly below $1294 with the same target of $1286 and a stop loss of $1298.

4 Hours Chart Gold - Double Top Patter4-Hour Chart Gold – Double Top Pattern

Technical Outlook- Intraday

Traders, we closed our earlier position in the gold due to the lack of volatility in the market. This has caused the gold prices to get stuck in a trading range of $1290.50 – $1294.

We can enjoy the choppy trading by selling several times below $1294, keeping in mind that our stop loss needs to be very tight.

On the hourly chart, the precious metal gold has tested $1294 twice and there is a high probability of selling below this double top pattern. We need to consider the fact that the market can become highly volatile in an unpredictable manner tomorrow and our objective is to secure you against these shocks.

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About the author

Arslan Butt // Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.
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