Gold prices continue to trade within a converging triangle on the daily timeframe. So far, it is difficult to predict their movement upon exiting this figure. With some reservations, the current pattern could also be viewed as a “pennant”, which typically signals the continuation of the previous trend. However, if the precious metal drops to $3,245, this would invalidate the bullish scenario and suggest a bearish reversal.
On the hourly timeframe, gold has been forming a descending triangle since August 10, with quotes attempting to pierce through the bottom of the figure between $3,325 and $3,330. Historical precedents suggest a breakdown is likely, which could push prices down toward $3,315. We recommend opening a sell position from the downward-sloping resistance level. This trading strategy will provide a better risk-reward ratio. A tight Stop Loss order could be placed above this trendline.
The overall recommendation is to sell gold, with Take Profit at $3,315 and Stop Loss at $3,360.
The volume of the open position should be calculated so that the potential loss (protected by a Stop Loss order) does not exceed 1% of your deposit. If your account balance does not allow opening such a position, it is better to avoid entering the market on this signal and wait for other trade opportunities that meet low-risk criteria.
This content is for informational purposes only and is not intended to be investing advice.
