Gold: short-term a little extended, but gains to come in the mid
In our technical piece from last Friday, we called Gold as a 'strong buy' after it broke its multi-year-resistance zone around 1,360/365 USD after a very dovish interpreted Fed last week on Wednesday.
'Unfortunately,' the mentioned dip back towards the breakout region around 1,360/365 USD did not occur, but instead, the precious metal continued to storm higher already hitting the first potential target on the upside around 1,440 USD, a high being marked in September 2013 and currently acting as a potential stop-over up to 1,700 USD.
In general, the mode looks very extended with the RSI(14) on a daily-time-frame hitting the highest level since February 2016. From that perspective, the risk-reward for long engagements seems to become a little unattractive and any solid, probably better than expected data set like today's US Durable Goods at 1330 BST could trigger a corrective move, even though a dip down to 1,360/365 seems very optimistic, we expect first buyers around 1,410 USD already.
On the other hand and based on our experience, we know Gold being quite trend-stable and even if the mode looks quite extended, Gold could continue to trade even higher without looking back.
This seems especially true if the incoming US data continues to disappoint. That said, further gains up to 1,480/490 USD, a high from May 2013, is a serious option, too.
Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 84% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
'Unfortunately,' the mentioned dip back towards the breakout region around 1,360/365 USD did not occur, but instead, the precious metal continued to storm higher already hitting the first potential target on the upside around 1,440 USD, a high being marked in September 2013 and currently acting as a potential stop-over up to 1,700 USD.
In general, the mode looks very extended with the RSI(14) on a daily-time-frame hitting the highest level since February 2016. From that perspective, the risk-reward for long engagements seems to become a little unattractive and any solid, probably better than expected data set like today's US Durable Goods at 1330 BST could trigger a corrective move, even though a dip down to 1,360/365 seems very optimistic, we expect first buyers around 1,410 USD already.
On the other hand and based on our experience, we know Gold being quite trend-stable and even if the mode looks quite extended, Gold could continue to trade even higher without looking back.
This seems especially true if the incoming US data continues to disappoint. That said, further gains up to 1,480/490 USD, a high from May 2013, is a serious option, too.
Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 84% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.