Trading Strategy for Gold on September 15, 2023
Gold prices have experienced a prolonged downtrend over the course of the month, culminating in XAU/USD trading at a nadir of $1,901 in response to the monetary policy pronouncements emanating from the European Central Bank (ECB). Subsequently, the precious metal staged a resurgence, ostensibly buoyed by sanguine sentiment within equity markets, albeit it remains in the vicinity of the $1,910 threshold.
Concurrently, the US Dollar exhibited renewed vigor, prompted by a mosaic of domestic economic data releases. On one facet, August bore witness to a robust uptick in retail sales, registering a month-on-month increment of 0.6%, notably eclipsing the forecasted 0.2% augmentation. Conversely, wholesale prices exceeded expectations, with the Producer Price Index (PPI) for August manifesting a 0.7% month-on-month and a 1.6% year-on-year upswing. However, the ascendancy of inflationary metrics failed to convince market participants of a proclivity within the Federal Reserve (Fed) for an additional interest rate hike. Subsequent to the dissipation of initial turbulence, risk sentiment reasserted itself, imparting an asymmetrical effect on US Dollar demand.
Trading Strategy:
Long Position (BUY) on XAU/USD:
Establish a long (BUY) position in XAU/USD within the price spectrum of $1,898 to $1,901.
Stop Loss (SL): Prudently place a stop-loss order at $1,896 to mitigate potential losses.
Take Profit Levels:
Take Profit 1 (TP1): Set the initial take-profit level at $1,915.
Take Profit 2 (TP2): Deliberate placement of the second take-profit level at $1,920.
Take Profit 3 (TP3): Consider a third take-profit level at $1,925 to capitalize on potential further upside.
Short Position (SELL) on XAU/USD:
Contemplate entering a short (SELL) position in XAU/USD when the price converges within the range of $1,919 to $1,921.
Stop Loss (SL): Prudently establish a stop-loss order at $1,924 to manage risks associated with this trade.
Take Profit Levels:
Take Profit 1 (TP1): Designate the initial take-profit level at $1,920.
Take Profit 2 (TP2): Consider the second take-profit level at $1,915.
Take Profit 3 (TP3): Contemplate a third take-profit level at $1,910 to capitalize on potential further downside.
It is imperative to adhere to robust capital management principles. Limiting risk exposure to 1% of one's trading account is advisable. Furthermore, it is prudent to avoid committing more than 5% of one's trading capital within the immediate 10 price levels. Above all, the judicious utilization of stop-loss orders (SL) is indispensable to mitigate unforeseen adverse market movements. It is incumbent upon traders to maintain vigilance and calibrate their trading activities in accordance with their extant capital allocations.
Gold prices have experienced a prolonged downtrend over the course of the month, culminating in XAU/USD trading at a nadir of $1,901 in response to the monetary policy pronouncements emanating from the European Central Bank (ECB). Subsequently, the precious metal staged a resurgence, ostensibly buoyed by sanguine sentiment within equity markets, albeit it remains in the vicinity of the $1,910 threshold.
Concurrently, the US Dollar exhibited renewed vigor, prompted by a mosaic of domestic economic data releases. On one facet, August bore witness to a robust uptick in retail sales, registering a month-on-month increment of 0.6%, notably eclipsing the forecasted 0.2% augmentation. Conversely, wholesale prices exceeded expectations, with the Producer Price Index (PPI) for August manifesting a 0.7% month-on-month and a 1.6% year-on-year upswing. However, the ascendancy of inflationary metrics failed to convince market participants of a proclivity within the Federal Reserve (Fed) for an additional interest rate hike. Subsequent to the dissipation of initial turbulence, risk sentiment reasserted itself, imparting an asymmetrical effect on US Dollar demand.
Trading Strategy:
Long Position (BUY) on XAU/USD:
Establish a long (BUY) position in XAU/USD within the price spectrum of $1,898 to $1,901.
Stop Loss (SL): Prudently place a stop-loss order at $1,896 to mitigate potential losses.
Take Profit Levels:
Take Profit 1 (TP1): Set the initial take-profit level at $1,915.
Take Profit 2 (TP2): Deliberate placement of the second take-profit level at $1,920.
Take Profit 3 (TP3): Consider a third take-profit level at $1,925 to capitalize on potential further upside.
Short Position (SELL) on XAU/USD:
Contemplate entering a short (SELL) position in XAU/USD when the price converges within the range of $1,919 to $1,921.
Stop Loss (SL): Prudently establish a stop-loss order at $1,924 to manage risks associated with this trade.
Take Profit Levels:
Take Profit 1 (TP1): Designate the initial take-profit level at $1,920.
Take Profit 2 (TP2): Consider the second take-profit level at $1,915.
Take Profit 3 (TP3): Contemplate a third take-profit level at $1,910 to capitalize on potential further downside.
It is imperative to adhere to robust capital management principles. Limiting risk exposure to 1% of one's trading account is advisable. Furthermore, it is prudent to avoid committing more than 5% of one's trading capital within the immediate 10 price levels. Above all, the judicious utilization of stop-loss orders (SL) is indispensable to mitigate unforeseen adverse market movements. It is incumbent upon traders to maintain vigilance and calibrate their trading activities in accordance with their extant capital allocations.
