CFDs are a leveraged product and can result in losses that exceed deposits. Trading CFDs may not be suitable for everyone, so please ensure you fully understand the risks and take care to manage your exposure.
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How to trade Gold after it failed $1300

Gold has added $220-240 to its price this year

CFDs are a leveraged product and can result in losses that exceed deposits. Trading CFDs may not be suitable for everyone, so please ensure you fully understand the risks and take care to manage your exposure.
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Hindsight is a great thing! If you invested in Gold at the beginning of 2016 and sold a couple of days ago, you’d be up about 20%. If you have missed out on this trade and think about taking a position now, what should you do?

Gold has already added $220-240 to its price this year, is there more upside? Or would going long mean you jump onto the bandwagon too late and get caught up in a significant retracement.

After adding $70 alone last week, Gold failed to stay above $1300. Failing at 1300 is of great interest to traders, since in 2015 the high was $1307 before the price collapsed to $1050 throughout the rest of the year. It took 5 month this year to recover these losses and return to $1300 and now it seems the precious metal is once again failing to advance.

One way to trade this scenario is to short Gold now with a stop just above last year’s highs at $1310 and a profit target at the 23.6% Fibonacci level at $1250 or 38.2% retracement at $1216.

Bulls may wait until 2015 highs are taken out and we have cleared the $1310 before taking a position. We are then quickly looking at $1330, $1345 $1392 highs of 2014 on the upside without much in between. 

Gold has regained its mojo in 2016 but can it hold onto it going forward? My view is bearish and I think it is great that we are at relatively high levels which give traders perfect entry opportunities. This view won’t change until we are above $1310 which has to be respected as a level and may bring back the bulls for a further move upwards.

This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.  Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. 

CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.