In all reality, gold has been a digestive mess over the past few weeks with no real directional bias seen in the price action. However, the lack of a directional bias does create an opportune environment for momentum traders to catch small moves of S/R levels in the market.
As is the case with soybeans, there are valid trading opportunities on both the long and short side of gold and traders should focus on price action around key technical levels.
At the current time, the most relevant area of support has been around 1288.0. Price has held at this area on multiple occasions in the past and this pivot may serve as a valid entry level for further trades. On the upside, the 1305.0 – 1307.0 area appears to be a level in which price has had a very difficult time trading above.
Given the sideways nature of the market, this area could serve as a profit objective for long positions and a potential short entry area for those looking to play the downside potential in this sideways, choppy environment. Traders should choose their entry levels wisely and avoid operating in the middle of this digestive mess as it could prove costly.
Gold 30-minute Bar Chart (e-Signal)