GOLD - BUY - 12th May 2022




GOLD - BUY - 12th May 2022 (Closed)


Good morning team,

We are taking a second crack at gold based on the technical zone the metal is trading at. Overnight the US reported another increase in inflation, therefore the “real interest rate” is moving further into the negative territory, despite the recent rate hike from the FED.

During the last FED meeting, Jerome Powell stated they would not be looking at rate hikes larger than 0.50%, therefore this should provide some fuel for gold to move higher.

GOLD and the USDJPY generally have an inverse correlation. The USDJPY is breaking down from a rising trendline support with a bearish divergence. Therefore this supports higher gold prices in the short term at least.

USDJPY Daily Chart

GOLD Daily Chart

There are 2 key trend lines coming into play at the 1850 support level, and the RSI and MACD are reaching oversold conditions.

GOLD 1 Hour Chart

Trade Setup: BUY market execution, current price 1853, stop loss 1831 and take profit 1890. 

Stop loss: 220 pips

Take profit: 370 pips

If the trade moves as expected, there is a chance of running the take profit higher.

 

Trade Setup
BUY - Market Execution

Entry
1853

Take Profit
1890

Stop Loss
1831