Beginning of October resulted on sharp sell off in Gold price action. The prime movers of market sentiment are FED, US Elections and Global monetary policy conditions. Rise in interest rates and absence of inflation are negative factors for gold. With FED rate hike prospects gaining strong influence, gold tumbled as a consequence.
Price Action Trading aspects of Gold
The current sentiment is bearish in precious metal. We can see the price action of daily chart as an evidence for this claim. Technical breakout on support level 1310.57 is a valid one, but in order to sustain the selling pressure, any rallies whether impulsive or corrective should result in selloff. It will be a confirmation for selling pressure. Any strong sign of buyers (such as a sharp upswing or strong bullish trend bar) should be treated with respect. In such circumstances, we should re-analyze our trading plan in the basis of resulting price action.
In short, Traders should wait for a retest or some corrective rallies to initiate positions. If we see any strong upswings or any primal indication of buying pressure – We need to reassess our trading plan.