Is this the calm before the storm?

Gold price prediction:

Gold Price Predictions: Is This Calm Before Storm?

Gold is at a crossroads ahead of an important week for the markets. While the current trading week has started with an explosion in many risk-sensitive assets, gold has enjoyed relatively calm price action and is teetering on the brink of a range breakout if US Treasury yields US continues to fall. With the July FOMC rate decision fast approaching and gold on the precipice of a possible rally or reversal, price action could slow until the risk of the event has shifted to what could be termed. calm before the storm “.

Gold Price Chart (XAU / USD) – Daily Time Frame (July 2020 – July 2021)

How to trade gold: the best strategies and tips for trading gold

That said, a flurry of nearby technical levels will also try to keep the gold contained until a suitable catalyst arrives. At the top is the 50-day simple moving average, a recent high near $ 1835, and a Fibonacci level, which may make it difficult to establish further progress.

Not far from the current spot price are the 200-day exponential simple moving averages and a descending trend line from August. trend line marks the top of the descending channel that has been in play since August 2020 and has served as resistance numerous times over the past year.

Gold Price Chart (XAU / USD): 4 – Time Frame (Feb 2021 – Jul 2021)

Obviously, collecting key technical levels and moving averages makes it difficult to navigate the big picture, but it can also open the door to multiple trading strategies. Breakout trading, range trading, and swing trading strategies may all be applicable given the current price chart and its directional bias. By trading at such a crucial point on the chart, the next few days could pave the way for a long-term trend in gold prices. However, patience may be the most prudent option at this stage, as Fed meetings tend to stimulate market movement.

In addition to insights and feedback from the Federal Reserve, US traders will analyze the earnings of the nation’s largest tech companies as about 40% of the S&P 500 components are expected to carry over into the next week. While summer trading conditions have often worked to reduce volatility, the potential for price movement next week looks high and gold appears to be coiled like a spring. In the meantime, follow me @PeterHanksFX on for updates and analysis.

–Written by Peter Hanks, Strategist for DailyFX.com

Contact and follow Peter at @PeterHanksFX

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