Commodities Market Analysis – Gold

*Live market analysis of Gold Spot price!*

Another favourite financial instrument of mine to trade is Gold. It is classed as a commodity but most often it is benched against the USD for pricing in $ per ounce. This is important to know because you will then need to convert the price to your base currency if you aren’t trading using US dollars in order to properly manage exposure and position sizing.

Let’s get straight in to the analysis and look at what the price of gold has been doing on the daily timeframe over the past few weeks/months.

Gold Spot $ daily timeframe chart

Since early February where Gold hit yearly highs of $1346 per ounce, price as been forming a simple downtrend with daily lower highs and lower lows. These are marked on the chart above with a basic trendline to show the bearish move. This downtrend has provided easy trading opportunities for a lot of traders just by simply selling at the trendline and Fibonacci retracement bounces. I actually covered one of these set ups in a previous blog post which you can find via the link below:

https://diaryofafinancekid.com/2019/04/11/beginner-trading-101-trendline-bounces/

As it stands, my intentions were to once again sell Gold spot at the daily trendline / 0.618 Fibonacci retracement level this week with the hope of a new lower high forming and the bearish trend continuing but that was not to be the case. Fresh news around the US and China trade wars came out over the weekend and on Monday and this caused traders and investors to flock back to Gold as a safe haven investment. The trade war is a huge deal for the global markets because of the fact that the 2 largest economies in the world are involved and global trade could be massively effected if trade agreements are to fail.

Price broke through the daily 50ema once more this week and then proceeded to break and close through the daily bearish trendline showing a potential shift in trend. Now, a higher high/higher low on the daily timeframe are yet to be made so the trend is still bearish but the fact that the 2 key dynamic resistances (trendline and 50ema have been broken give me confidence to look for more upside potential.

Let’s look at the 4hr timeframe chart and I will mark up the key factors I am using in my technical analysis.

Gold Spot $ 4 hour timeframe chart

The 4hr timeframe is my favourite for trading gold. It provides quite a few trade set ups in the near term and allows for more accurate scaling in when swing trading. On the Gold price chart above you can see that the 4hr timeframe has found strong support at the $1270 zone in early May and is now making significant moves to the upside with consistent higher highs and higher lows being made. This is why my overall bias on gold is bullish and to look for entries for long positions.

The list of reasons why I am looking to buy Gold are as follows:

  • Daily bearish trendline and 50ema broken to the upside.
  • 4hr timeframe has found support at $1270.
  • 4hr resistance at $1290 now broken and closed above.
  • 4hr bullish trend with strong momentum.
  • US & China trade war looming causing concern for global traders and investors leading them to buy into Gold for safety.
Gold Spot $ 4 hour timeframe chart
(Potential long position entry)

My favoured long position entry is marked on the 4hr chart above and I have uploaded this to the TradingView platform so you can keep track of it live. As always, I do all my technical analysis on the fantastic TradingView charting software.

I am looking to buy gold at the $1290 price level. This zone is a meeting point of multiple factors that should provide strong support for price to then continue on its bullish trend. Ideally, if the trade war rumours continue then Gold could go on to meet the yearly highs at $1346 per ounce and higher. So as long as the 4hr trend remains bullish and if the daily trend becomes bullish then I will be looking to buy all higher lows up to the $1340 region.

Track this Gold analysis live by clicking on the link below:

https://uk.tradingview.com/chart/XAUUSD/b46aJA1P-GOLD-Long-Trade-4hr-BULLISH-TREND-FIBONACCI-TL-BOUNCE/

Thanks for reading and don’t forget to like and follow this blog post to stay up to date with my technical analysis! 🙂

DISCLAIMER: None of the information posted on this site is to be considered investment/financial advice. Trading is high risk and you should only trade with money you can afford to lose.

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