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Nick Goold

Technical analysis

Gold has been in a strong downtrend since August as higher US interest rates and the strong USD weaken demand. But that downtrend was broken last week as US interest rates increase investors can earn higher yields in other markets. The stronger USD makes Gold more expensive around the world which results in fewer buyers of physical Gold.

The market held support twice at 1680 forming a double bottom pattern encouraging buying from traders. The break of the daily 10 moving average confirmed the end of the downtrend last seeing the market change to a range trading market.

The fundamental outlook for Gold remains bearish as US interest rates are likely to continue rising. Should there be negative US economic releases this week there could be a good buying opportunity. Alternatively, should gold move back below the 10-day moving average there will be a good selling opportunity as the market is likely to break support.

Daily NY Gold with 10 day moving average

Resistance:1730, 1750, 1764, 1785, 1800, 1820, 1845, 1875
Support:1705, 1690, 1685, 1697, 1675, 1646

The benefits of trading NY Gold

Gold is a very popular market to trade for many retail traders due to three main factors listed below:

Benefit 1: High volatility

Gold has higher volatility than most FX pairs which means more trading opportunities. Whether you are a scalper, day trader or scalper there will be daily opportunities to find highly profitable trades.

Benefit 2: Strong trends

When markets are moving sideways in small ranges it is very difficult to find profitable trades. Gold has regular strong trends on 5 minutes, hourly and daily charts so there are many high-risk rewards (higher profits than losses) for all types of traders.

Benefit 3: Low trading costs

Gold has many active traders in the market at all times so the market spread is very narrow compared to the volatility. Low trading costs make Gold a very attractive market for FX traders to add to their list of markets they trade.

Titan offers a very competitive Gold trading service which all account holders can access easily from their MT4/MT5 login.

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