The Range Narrows in Gold, As Sentiment Improves But Uncertainty Remains
The price action in Gold is showing increased uncertainty
GOLD was very volatile from January this year until late August, as the sentiment in financial markets turned massively negative, due to the coronavirus and the lock-downs. Gold broke above $2,000, making record highs in the first week of August, but then made a strong reversal down.
The price declined more than $200 pips to $1,860s, but then it turned higher again after failing to make new lows. Although, buyers couldn’t make new highs, which means that we saw another reversal lower. Since then, the highs keep getting lower and lows keep getting higher.
This sort of price action points to a triangle being formed in Gold, which means that the range is getting narrower as the volatility decreases. The trades are getting smaller on Gold, so we suggest that you place closer targets if you are trading Gold, until a breakout takes place in either direction.
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