Gold was a little quiet in trade on Monday, however as we rolled on, some strength did come back into the yellow metal. One of the key drivers of Gold that I have been paying attention to is the US Dollar Index. As the USD moves higher, we see that gold will fall away.
That’s certainly been the case over the last few weeks. As such I am bullish on the USD and bearish on gold. However what I did notice and point out in my morning preview, was that we have just hit resistance in the US Dollar Index. That might cause us to take a pause in the gold decline and even pull back a bit more.
Trading Plan
My trading plan for today is to wait for the pullback and look to short around the 1288-1290 region. In that area, we have overhead resistance and the 50-SMA to slow us down. It will also give us a chance to pull back from resistance in the DXY.
As always price action is important in those areas and I like to see a bearish candle to confirm my thoughts.
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