Gold has experienced selling the past twelve hours and profit-taking is a likely culprit.
It is seldom smart to stand in front of a trend that is easy to see technically. However, short term traders may believe the long term does not apply to them, and they are right if they are nimble enough to trade Gold and use solid risk management. Support for Gold appears to be around the 1794.00 USD level, granted this is a large distance from the commodity’s value as this article is written, but Gold has proven it moves fast and if a speculator uses a conservative amount of leverage they may find this juncture of interest to aim for should profit taking continue today.
Short term resistance has proven strong around the 1810.00 mark and if Gold breaks through this value upwards, resistance has proven capable near 1815.00 USD the past week. So is it safe to short Gold under the present market conditions? Experienced speculators may believe there is an opportunity to be found to the downside and may have reason to suspect Gold’s strong upward trend may need to take a breather before finding more momentum from buyers.
Gold is a dangerous trade at the moment, its short term trend indicates more selling may occur, but it should be acknowledged upon touching short term support the precious metal has reversed higher on many occasions. That is why I have put a five-day chart of Gold to be inspected here because early last week after profit-taking took place within the commodity, a sudden buying spree was ignited and it promptly took the precious metal to new record highs.
An interesting trade may be to wait for profit taking to run out of steam and place limit orders to buy Gold near the 1794.00 level with a stop loss near 1791.00. Speculators might be happy to wager on a downside trend for the precious metal, but I personally would prefer to wait for more selling to take place and then look for a reversal upwards again.
Gold Short Term Outlook:
Current Resistance: 1809.00
Current Support: 1794.00
High Target: 1815.00
Low Target: 1786.00
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