Gold is fully within the depths of fast market conditions. While the precious metal is certainly alluring and full of opportunity, trading Gold can also lead to quick losses if risk management is not used properly. The price of gold is moving in large increments, meaning that stop losses need to be securely in place to guard against sudden surges which have become part of the daily landscape within the commodity.
The price of Gold is challenging record highs and this has attracted a large amount of speculative players who are wagering on its short term direction. Technical support and resistance levels remain conjecture and perception. While the 2000.00 USD per ounce level may be the talked about target for those in the media who are attracted to the sound of this large number, looking for targets that are more within reach on upside movement is how traders need to actually participate.
Having broken through resistance levels consistently when looking at five day trading charts, speculators should be careful to understand staying in a trade for this type of time period opens itself to many challenges, particularly when the market gyrates and goes against the direction they have chosen. If you are a pure speculator and can withstand the volatility in gold and have a large enough account you will be comfortable, but if you need to be prudent and manage your cash wisely using limit orders when trading gold makes the most sense.
Technically the bullish trend for gold is simple to see and understand. However, the precious metal has run into resistance the past couple of days and has provided a range between 1940.00 and 1980.00 USD. The depth of that range in monetary value cannot be overstated. Traders need to carefully choose the size of the positions they are speculating on when trading gold CFDs.
So which direction should you speculate on? Keeping in mind the long term trend of gold, buying the commodity still appears to be the logical choice. However, buying gold on pullbacks when it hits technical support levels is a solid and conservative way to speculate with the commodity.
Gold Short Term Outlook:
Current Resistance: 1971.00
Current Support: 1945.00
High Target: 1981.00
Low Target: 1930.00
