Trading Spot Gold: Breaking Down The Current Price Action

Research Notes For 02 to 06 June > https://www.unum.capital/post/r0206june

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• Here's a breakdown of the current price action: 

• The 7-Day Trend is indicated as "Strong," while the 14-Day Trend is "Bullish."

  • Comparison: Both the short-term (7-day) and slightly longer short-term (14-day) trends indicate upward momentum ("Strong" and "Bullish" respectively). This suggests a consistent buying pressure across these timeframes. The "Bullish" 14-day trend reinforces the "Strong" 7-day trend, indicating that the recent strength is part of a broader upward movement.

• Potential Trading Approach for XAUUSD:

  • Short Term (Approximately Next 1 to 10 Trading Days): The model notes, "Attempting To Advance Whilst In A Bullish Regime-If It Pulls Back Use The Prior Session Close Or 8-EMA As An Accumulation Zone".

    • Approach: The short-term view suggests buying opportunities on pullbacks to the prior session close or the 8-EMA within the existing bullish regime, indicating a strategy to join the upward trend on temporary weakness.

  • Medium Term (Approximately Next 2 to 4 Weeks): The model indicates "Buyers In Control But Weakness On Lower Time Frame-Look For Pullback To 8 Or 21-EMA (Buy Range) Before Next Move Higher".

    • Approach: The medium term suggests that buyers are in control, and potential buying opportunities may arise on pullbacks to the 8-EMA or 21-EMA on lower time frames before a further upward move.

  • Long Term (Approximately Next 5 to 8 Weeks): The model has "no reading available".

    • Approach: No specific trading approach is provided for the long term.

• Overall Trading Considerations for XAUUSD:

  • Bullish short to medium term: Both the 7-day and 14-day trends are bullish, and the medium-term outlook also favors buyers.

  • Short-term accumulation: The strategy for the short term is to look for accumulation (buying) opportunities on pullbacks.

  • Medium-term pullback buying: The medium term also suggests buying on weakness (pullbacks to EMAs).

  • Long-term uncertainty: There is no reading available for the long-term perspective from this model.

    
    

Overall Trading Considerations for XAUUSD: Consistent bullish momentum in the short to medium term suggests a bias for buying opportunities on pullbacks. The short-term strategy focuses on accumulating positions at support levels like the prior session close or the 8-EMA. The medium-term view reinforces this by suggesting buying ranges around the 8-EMA or 21-EMA on lower time frames. The absence of a long-term reading means that the analysis is primarily focused on the shorter to medium-term horizons.

Lester Davids

Senior Investment Analyst: Unum Capital