Risk Appetite Dampens – Is It Good Time to Sell Gold?
Arslan Butt • 1 min read
What’s up, traders.
Early this morning, the gold prices edged down as the dollar rose and demand for safe-haven assets eased after U.S. Treasury Secretary Steven Mnuchin announced the U.S. trade war with China remained “on hold”. As a result, investors are moving back to risky investments, causing a sell-off in gold. Here’s gold’s trading signal…
Gold – XAU/USD – Breakout of Sideways Channel
If you recall our earlier update, Choppy Trading In Gold – Brace yourself for a Breakout, the market exactly moved as per our forecast. Gold was stuck in the sideways channel which supported near $1,287 along with a resistance near $1,294. Finally, gold has come out of the sideways pattern in response to a stronger dollar and easing remarks from the U.S. over trade war sentiments. The absence of trade tariffs and friendly tone between the two countries is impacting the gold price more adversely.
Gold – 2 Hour Chart
For now, gold is testing support resistance level of $1,285 on the 2-hour chart. Perhaps, it’s just a retracement because of earlier sell-off. Technically, I’m expecting another round of selling below $1,285 and $1,287. The leading indicators are below 50 and signaling that sellers are looming around the corner.
Gold – XAU/USD – Trading Idea
Considering all the scenario, I will be looking to open a sell position above $1,287 with a stop below $1,291 and take profit near $1,277. Good luck!