The golden metal in its 8-hour chart illustrates a bearish process that remains intact. Follow with us our reasoning for a potential bearish continuation in Gold.
1. The latest rally developed by the US Dollar index, suggests the short-term weakness in the yellow metal.
2. The stock market's rally shows the risk-on preference by big traders. In consequence, the safe-heaven commodity should under-performs for a short time.
3. From the wave analysis perspective, price action makes us expect a decline in five waves as a wave C labeled in black. This downward movement could accelerate on coming sessions. While price continues moving under $1,472.9, the bias will continue bearish.
4. A sell-side position will activate if the price closes under $1,459.5 per ounce. Our conservative profit target is at $1,450.5; a bearish extension could drive to the golden metal to continue its declines to $1,442.25, even until $1,432.3 per ounce.
5. Our bearish scenario will be invalid if price soars and closes above $1,472.9.
6. The risk of the bearish scenario will come from the end of the bullish cycle on the stock market, or if the US Dollar index continues developing mostly bearish.
Trading Plan Summary
Entry Level: $1,459.5
Protective Stop: $1,472.9
1st Profit Target: $1,450.5
2nd Profit Target: $1,442.25
3rd Profit Target: $1,432.3
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Risk Warning: CFD and Spot Forex trading both come with a high degree of risk. You must be prepared to sustain a total loss of any funds deposited with us, as well as any additional losses, charges, or other costs we incur in recovering any payment from you. Given the possibility of losing more than your entire investment, speculation in certain investments should only be conducted with risk capital funds that if lost will not significantly affect your personal or institution’s financial well-being. Before deciding to trade the products offered by us, you should carefully consider your objectives, financial situation, needs and level of experience. You should also be aware of all the risks associated with trading on margin.
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