Gold provided an excellent example last night as to why you need discipline when you are trading. It is outside of our short entry zone (from a timing perspective) and it has breached 2 key trend lines which have some nice headroom above them.
We should therefore NOT maintain short positions and certainly NOT add to short positions.
The likely scenario is that gold will attempt to hit a higher very important medium term resistive trend line within the next month – a move which is likely to coincide with a number of stock indices.
We do have a question mark though at around 1835 where a knot of resistance comes into play. This makes it difficult to recommend a long at current levels as the risk/ reward ratio is simply not good enough.
If gold were to fall back 10 points or more in the next few sessions then a relatively low risk long may be available.
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