Recently gold is moving in a range without any direction around our supply zone but the most important part of the story is that it's respecting the downtrend line starting in February. The main reason for a rally currently is the shaky situation around the US-China negotiations, the higher tarrifs kicked in tonight while the meetings with the Chinese delegation in Washington are supposed to continue.
In my point of view, the market could be driven higher and we can see a retest or even a false break of the the $1300 lvl (and the down trend line) but then things will calm down and the market will reestablish the downtrend toward 1250.
The risk is obviously that the trade war will escalate and then the sky is the limit. But we will abandone our current view on gold only in case the gold would close a week above $1320 (during the week it can break above this lvl, remember the time zones are different for each continent, but we all have the same weeks).
If someone cant wait, another option is to enter now at the trendline with shorts (half unit) and waiting for even better entry few dollars above the $1300 with the second part of the trade, where all the stops are waiting. This is however much more risky as in our point of view $1320 could be tested on a short term panic rally driven by investors looking for safe heaven.
In my point of view, the market could be driven higher and we can see a retest or even a false break of the the $1300 lvl (and the down trend line) but then things will calm down and the market will reestablish the downtrend toward 1250.
The risk is obviously that the trade war will escalate and then the sky is the limit. But we will abandone our current view on gold only in case the gold would close a week above $1320 (during the week it can break above this lvl, remember the time zones are different for each continent, but we all have the same weeks).
If someone cant wait, another option is to enter now at the trendline with shorts (half unit) and waiting for even better entry few dollars above the $1300 with the second part of the trade, where all the stops are waiting. This is however much more risky as in our point of view $1320 could be tested on a short term panic rally driven by investors looking for safe heaven.