UPDATE: Gold's double bottom - A medium term view

OANDA:XAUUSD   Gold Spot / U.S. Dollar
In my last two gold trades, I took advantage of support and trendline patterns while having a bullish view on gold as a way to play what I believed to be an inflationary environment. While both trades (see here and here) worked quite well, gold has spent the past few weeks languishing after a swift move lower. Instead of gold , oil and the stock market have been the inflation vehicles of choice. That all being said, I believe there is now another trade setup in gold .

In the chart above, we can see that the topside of the breakout trendline held in as support and in April the price has tested those lows. After a few days of grinding, a bid in gold is starting to emerge. I think this trade will be slow to the upside, but I'm betting on a steady climb back to the March high and from there for a 'W' pattern to emerge by testing the old February high. Any breakout from there means gold will be off to the races, but I believe that time is somewhat far away.

Buy gold here at 1299 ( GC futures or GLD )
Target 1: 1322
Target 2: 1345
Stop: 1285
Trade active
Comment: A rather large move in gold overnight has this position profitable very quickly (if you were trading futures)
Trade closed: stop reached: Stopped out after some initial gains.
same as my thought
+1 Reply
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