- Bears have taken control of Gold as it breaks out of triangle formation.
- Targets are set at $1831 for bears.
- Patient bulls could wait for lower prices to get in.
Last week our main focus was on the small triangle formation on the Gold daily chart. Recently, price has broken out of the bottom of this triangle as the bears haven proven too strong. There are a few levels we can monitor at the moment and potential ways to trade this setup so lets get into it.
Firstly, in order to take a position in Gold at the moment, there are two main ways we could do this. We could either wait for price to rally back up to the point at which the trianlge broke and then initiate a short there with a stop loss at $1980, or we could grind down to a shorter time frame, possibly the hourly chart and short any rallies we see on there.
Making a simple measurement of the triangle, gives us a bearish price target of $1831 which is our new level to watch for now and is the most significant support from here.
We must keep in mind that these pattern don’t always have perfect hit rates and often end up as false setups, however, probabilities are in the favor of the bears at the moment and even if a trader is bullish on Gold, being patient now could allow them to get in at lower prices.