DISCLAIMER: I am not a financial advisor. All contents on this blog are solely my own personal views and for Commodities/CFDs Trading education/entertainment purposes only. Commodities/CFDs Trading are very risky. Losses can exceed deposits. Enter with discretion.
We have seen a rather mediocre or lackluster Gold price action performance in the year 2020 where a lot of speculations that a beyond $2,000 mark can be achieved. Perhaps it did but short-lived as the yellow metal’s price rose and fell then went sideways. At least Gold showed its value especially last year’s epic bull-run started from April and lasted till August of 2020 where a lot of traders and investors sentiments alike poured on the yellow metal’s price uprising during the COVID-19 pandemic’s first year.
Like the rest of the stocks and commodities, Gold is looking hopeful in the start of the year 2021.
Looking at the daily chart of XAUUSD right now tells me that I should not miss the uptrend action. I am seeing a buy signal opportunity wherein after the Gold’s price hit the recent local bottom found at $1,802 mark last January 18, 2020, it rebounded strongly.
The falling/descending wedge pattern reversal has perfectly occurred! On top of that, the yellow metal’s price went back inside the Ichimoku cloud. This time it is forming an ascending wedge pattern versus previously.
In fact, the 200-day simple moving average has continued to hold the price very convincingly. This has created a very strong support that needs a great sell-off pressure in order for it to be taken down.
My trading plan is a long position. I wait for the price corrections on the hourly RSI suggesting for over-buys. My target entry will be at $1,850, giving plenty of room at the stop loss at $1,800. I will then set the take profit at the $2,000 mark which I assume is the near long-term resistance when this bullish momentum continues. It will be re-tested knowing the fact that upon inauguration of incoming President-elect Biden drives more stimulus hopes. More dollar out of debt thus create higher inflation rate. It is time for the safe-haven assets like Gold to shine once again.
This trading plan will give me a Risk:Reward ratio of approximately 3.0. A worthy trade to take on.
Thanks a lot for reading my analysis on Gold and I wish you a great trading day ahead!
