Next Steps in Gold Day Trading: Shorting with the Trend

Next Steps in Gold Day Trading: Shorting with the Trend

Spot gold experienced significant volatility during the Fed's interest rate decision and Powell's speech.

During Powell's speech, spot gold prices continued to decline, falling over 1% intraday to below $3,650/oz, nearly $60 below the intraday high.

While the market eagerly anticipated the expected 25 basis point rate cut, Powell's guidance on the path of future rate cuts clearly fell short of the dovishness expected by the market.

This "buy the expectation, sell the reality" strategy caused gold prices to initially rise, then rapidly fall.

Prior to the meeting, gold prices were significantly overbought and in need of a technical correction.

The Fed's news merely provided a catalyst for a pullback.

Technical Analysis:
Downside Support Levels:

Short-term Support Level: $3,645 (bullish flag breakout point)

Important Support Level: $3,633 (horizontal support); a break below this level could lead to a drop to the $3,610-3,600 range. Stronger support levels: $3562-3560 area and the psychologically important $3500 level.

Many analysts believe this pullback could be a healthy technical correction, and that gold's long-term bull market fundamentals remain solid.

Trading Strategy Recommendations:

For short-term traders, aim to profit on a rebound or further decline after a pullback, and maintain a tight stop-loss.

1: Cautiously long from now on:

First entry point: Around $3640-3645

Second entry point: $3620-3630 range
Consolidated stop-loss: Below $3610

First target: $3670-3680

Second target: $3700 (reduce or close positions)

Put on a technical rebound on a pullback to the "bullish flag" breakout point and horizontal support.

2: Short with the trend: Short on a rebound to the $3675-3685 range and stagnate.
Stop loss: above 3700 points
First target: 3650 points
Second target: 3630-3640 points
Bets that the Federal Reserve will not be as dovish as expected continue to persist. Capitalize on rallies to resistance levels and profit from pullbacks.