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FX.co ★ GOLD Trading Plan for 17 May, 2021

GOLD Trading Plan for 17 May, 2021

  • Risk-on mood favors gold buyers amid downbeat US dollar, Treasury yields.
  • Sluggish US data cools down inflation concerns, helps Fed to defend easy money policies.
  • Geopolitical, covid headlines can offer intermediate moves but nothing major to keep a tab on.

GOLD Trading Plan for 17 May, 2021

Gold surrendered a major part of its intraday gains to the highest level since early February and was last seen trading around the $1,846 region, nearly unchanged for the day. A goodish rebound in the US Treasury bond yields turned out to be a key factor that prompted some profit-taking around the non-yielding yellow metal. That said, a combination of factors should help limit any deeper losses amid absent relevant market moving economic releases from the US.

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Investors seem convinced that the Fed will keep interest rates low for a longer period. This, in turn, continued weighing on the US dollar and extended some support to the dollar-denominated commodity. Apart from this, a generally softer risk tone – amid worries over the continuous surge in new COVID-19 cases in Asia – further acted as a tailwind for traditional safe-haven assets, including gold.

Strong resistance seems to have formed at $1,860, where the descending trendline and the Fibonacci 61.8% retracement of the January-March downtrend meets. A daily close above that level could attract buyers and open the door for additional gains toward $1,875 (static level, January 21 high, January 29 high).

$1,820 (Fibonacci 50% retracement) could be seen as the initial support ahead of $1,800 (psychological level, 100-day SMA, 20-day SMA). With a convincing drop below the latter, additional losses toward $1,780 (Fibonacci 38.2% retracement) could be witnessed

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade
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