Today we also look at potential short positions on a daily close below $1307.15 – the 50% retracement of the June to August rally.
As you can see from the chart below, over the last couple of days spot gold has found good buying activity at this retracement and therefore with the daily MACD firmly below zero and heading lower, we feel selling spot gold on a close below $1307.15 could work well from a momentum strategy. If this were to materialise we would continue to suggest a potential stop loss at $1378.
In upcoming trade we get the August read on US durable goods (expected to decline 0.2%) and new home sales (anticipated to increase to 420,000 homes). Good numbers here could inspire gold selling.
So to recap, our potential strategy is to look to sell on rallies to $1335 or sell on a daily close below $1307.15. In either case we feel placing a stop at $1378 is prudent, while we initially look for a downside move to $1278, although could look at extending this if momentum gathers pace.
See gold chart below.
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