Day three: our potential gold trade

Fundamentally, gold fully deserved to see the solid downside move seen through European and US trade. 

Russian President Vladimir Putin detailed in a press conference that he still holds the right to use military force, however he also said he was not considering the annexation of Crimea into Russia’s territory. There was certainly a lot of talk around moves in financial markets, so it seems logical that the market will keep an eye on the situation, however it should continue to get priced out.

Looking at price action in [commodities:gc|gold|, the triple divergence seen on the daily chart is a very bearish development; however the uptrend drawn from the February 3 low seems to be supporting the downside. The MACD on the daily chart is looking like it wants to break the signal line, and a cross here should coincide with a break in the uptrend. I will look at shorts on this development, with a stop at $1365.

There is a fair bit of data out tonight, with US ADP payrolls and services ISM in play. Good numbers here should be good for the USD and thus weaken gold.

Spot gold
IG Charts

The information 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 Bank S.A. 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 and as such is considered to be a marketing communication.