Introduction
Gold futures have continued their steady run upwards, boasting an impressive 31% return over the past year. The question is whether we see this trend continuing.
Technical Analysis
The daily chart shows us the 50-moving average positioned well above the 100-moving average. There is also a flag formation where gold sat sideways since the middle of March which it recently break out from. This pattern appears to be confirmed as there is a continued bullish momentum after the breakout.
The pivot points above could be strong targets to aim for on bullish trades if price does not print a reversal just after breaking above the high at $2,572.
High-Probability Long Trade:
Entry Point:
- A pullback to around $2,537.3 (R1 pivot point) could provide a good entry opportunity if the price shows signs of support (e.g., bullish candlestick patterns or a bounce).
Stop-Loss:
- Set a stop-loss below the $2,500 level to manage risk. This level is slightly below the recent support and should give enough room for the trade to develop.
Target:
- Short-Term: Target the $2,601.5 level (R2 pivot point).
- Medium-Term: Target the $2,706.5 level (R3 pivot point).
Risk-Reward Ratio:
- The risk-reward ratio is favorable, aiming for approximately 1:2 or higher depending on the entry point and target level.
