Trading Spot Gold: Breaking Down The Current Price Action

Research Notes For 09 to 13 June > https://www.unum.capital/post/r0913june

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Here's a breakdown of the current price action:

• The 7-day trend is indicated as "Neutral," while the 14-day trend is "Rangebound."

Comparison: Both the short-term (7-day) and slightly longer short-term (14-day) trends suggest a lack of clear directional momentum, with the 7-day being "Neutral" and the 14-day being "Rangebound." This indicates a period of consolidation or indecision in the market.

Potential Trading Approach:

• Short Term (Approximately Next 1 to 10 Trading Days): The model notes, "The Share Has Been Weak, With Selling Pressure However There is a Probability of a Small Rebound."

  Approach: While there has been recent weakness and selling pressure, there's a noted probability of a small rebound. Traders might look for opportunities to fade short-term strength or confirm the rebound before entering long, being mindful of the underlying weakness.

• Medium Term (Approximately Next 2 to 4 Weeks): The model indicates "no reading available."

  Approach: Without a specific reading for the medium term, traders should rely on the confirmed short-term and long-term trends, or wait for more data to emerge before forming a medium-term bias.

• Long Term (Approximately Next 5 to 8 Weeks): The model states, "Near Overbought But Upward Momentum Is Slowing-Potential Short Candidate-If Range Highs Don't Hold Then Look To Short Using The 8-EMA As A Target Range."

  Approach: The long-term perspective suggests that while the asset is near overbought, upward momentum is slowing. This presents a potential short candidate, especially if range highs are not held. A short position could target the 8-period Exponential Moving Average (EMA).

Overall Trading Considerations:

• Conflicting signals: The short-term trends ("Neutral" and "Rangebound") suggest indecision, while the long-term indicates slowing upward momentum and potential for a short.

• Short-term rebound potential: Despite overall weakness, there's a possibility of a small short-term rebound.

• Long-term short opportunity: The long-term outlook points to a potential short-selling opportunity if range highs fail to hold, with the 8-EMA as a target.

In summary, the current view is mixed, with short-term indecision, a potential for a small rebound, and a long-term bearish bias if key resistance levels are not maintained. Long-term traders should be cautious of the slowing upward momentum and consider short opportunities if range highs are not held.

Lester Davids

Senior Investment Analyst: Unum Capital