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Tips for traders, 21 July 2020

Gold finally breaches its sideways area

 

Confusion among participants in the last three months had made the price of gold stay in its trading range, with many retail traders confused as well.

On one hand, the demand for gold increased as ETFs started to hold more. Conversely, the price didn’t increase before $1,720 was breached in the second half of June.

Link to the charthttps://www.tradingview.com/x/Kb9VTFgl/

This appreciation has created a pattern that indicates gold is in an upward channel. Price has breached its longer term Bollinger Bands that measure the average monthly range. It’s also now above its shorter Bands that measure movement in the past week.

In the shorter term, the possibility of continuation is quite high.

Link to the charthttps://www.tradingview.com/x/r7vk6nom/

If the price can retrace within its green Bollinger Bands which measure daily movement, short-term trades might be feasible with a measured amount of risk. Maintaining relatively lower risk is of utmost importance because losses are more likely otherwise..

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