Gold to US Dollar
- By date
- Metadoro first
Gold appears significantly overbought, with technical signals resembling those seen in October 2011 when it set a long-standing record of $1,920 per ounce. Now trading at $3,322, the metal seems primed for a correction, with a downside potential of at least 10%, targeting the $2,950–3,000 range.
The technical setup supports this bearish view. A failed diamond reversal pattern formed in mid-April has now expanded into what could be the largest diamond structure in gold trading history, and a strong reversal signal. Momentum indicators are showing signs of exhaustion, and recent gains may have been driven by speculative fervour rather than fundamentals.
Fundamentally, the softening of U.S.–China trade tensions and a potential false breakout above trend resistance further weaken the bull case. With upward momentum fading, a pullback seems increasingly likely.
Your short strategy from current levels with a target at $3,000–3,050 appears well-reasoned. The stop-loss at $3,630 provides a sensible buffer above the highs in case of unexpected volatility.
Gold to US Dollar
- It is traditionally considered as a safe haven asset, which is in demand when market uncertainty and risks are rising. Geopolitical tensions, economic turbulence, and high inflation usually contributes to rising gold prices;
- Gold prices usually move in the opposite direction to the U.S. Dollar vs other currencies. This is not only because gold prices are measured in U.S. Dollars, but also because it derives from the comparison of the yields of safe haven Dollar-denominated assets like U.S. Treasuries that have regular coupons and Gold itself that has no extra paid interest. So, a rising Dollar and Dollar-denominated assets result in lower demand for Gold, dumping its price;
- The demand for precious metal and its use in production purposes also affect gold prices. For example, central banks may have extra demand for gold because they want to store it into their Forex and Gold reserves. Jewelers can contribute to elevated demand too;
- Gold prices could become extremely volatile during trading in a very short period of time. This volatility usually exceeds currencies, commodities, and stocks by far. It may result in a large profit, but it also has large risks while trading.
Traders must be cautious when trading gold. It is better to trade with low volumes. Experience in trading is vital to exercise gold trading.
| Ticker | XAUUSD XAU/USD |
| Contract value | 100 Tr.Oz. |
| Maximum leverage | 1:100 |
| Date | Short Swap (%) | Long Swap (%) | No data |
|---|
| Minimum transaction volume | 0.01 lot |
| Maximum transaction volume | 100 lots |
| Hedging margin | 50% |
| USD Exposure | Max Leverage Applied | Floating Margin |
|---|
