News

Gold finds support in downchannel

09/05/2019

Gold (XAUUSD) is starting to behave a little strangely, and seems to be finding buyers despite being so obviously in a descending channel (which currently has its base around $1260). The spectacle of more North Korean missile-based shenanigans will be adding to support but buying Gold because of this seems like something of a Pavlovian reaction. Gold has become remarkably stable of late, and while it’s difficult to have much faith in the precious metal as an investment opportunity it’s fair to say that you aren’t going to lose too much money by being long. Rather perversely, the risk with slow directional movements in any investment product is that reversals can induce a state of market panic that can undo the work of weeks over a considerably shorter timeframe. At the moment we’d continue trading the $1260-$1290 range but a close outside the channel would give us reason to reassess the risk, as Stop Loss buying would undoubtedly bring a pause to the downtrend.

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