Commodity traders gather ’round!
Spot Gold (XAU/USD) is having trouble breaking above a resistance zone.
Will this lead to the commodity extending its short-term downtrend?
Spot Gold (XAU/USD): 1-hour
In case you missed it, Spot Gold (XAU/USD) has been trading in a downtrend since it found resistance at the $2,000 level in mid-April.
The commodity then dropped to new May lows ($1,830) after Uncle Sam’s 8.3% annual inflation figure toned down talks of “peak inflation.”Now that the Fed has one more reason to maintain its aggressive tightening schedule, traders went back to buying the U.S. dollar.
XAU/USD had clawed its way to $1,850 after the U.S. CPI release but it looks like there are enough bears around the level to kill the momentum.
And why not? $1,850 lines up with not only a trend line resistance but also the 100 and 200 SMAs and the 38.2% Fibonacci retracement of May’s downswing.
You can jump in at current levels if you’re a trend player who’s confident that XAU/USD will extend its downtrend and make new May lows.
If you’re pretty sure that gold bulls are just getting started, then you can also place orders above the trend line resistance and bet on a potential breakout.
This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.