Gold is reaching a watershed moment. Watch for key levels.Gold saw sharp fluctuations in both bull and bear markets on Friday. What happened?
On Friday, gold was on track for its biggest weekly gain since the collapse of Lehman Brothers in September 2008, which triggered the global financial crisis. Trump's confirmation of a meeting with China on Friday eased market concerns about an escalation in the two countries' trade conflict. His tone has softened, leading to a cooling of precious metals trading.
As Trump eased his threats against China, gold prices fell 2% from their all-time highs. Trump's softening stance weakened gold's safe-haven demand and boosted the US dollar. Rising Treasury yields are also increasing pressure on non-yielding assets like gold.
Tomorrow's Asian session, Monday. First, after Friday's sharp drop, a short-term correction in gold prices seems imminent. Regardless, the likelihood of weakness remains bearish, as Friday's sharp decline underscores the extent of next week's correction.
For next week's market, the trend remains stable and volatile, which is the trading premise. However, this week's retracement reached a low of 4186. If the retracement exceeds this level, the trend will need to be redefined, and the strategy will need to be adjusted accordingly.
4275 is the starting point for a second decline, and a strong breakout will allow the bulls to continue. Therefore, 4275 is a defensive level for the volatile trend, but a rebound is likely next week.
Trading Strategy:
Go long near 4225, with a stop-loss at 4215. Profit range: 4275-4300.
If the price rebounds to 4275 and fails to break above it for a long time, go short at this level, with targets focused on 4220 and below.
More real-time strategies will be posted in the channel, so stay tuned.
