HG MARKETS:

Gold (XAU/USD) continues to face strong selling pressure on every rally, as we noted last week. The price dropped to the 2904/00 support level yesterday, but longs were stopped out below 2895 before the expected bounce. The market has shifted into a phase of increased volatility, which is likely to persist for weeks, signaling a potential reversal or topping pattern.

At this point, reaching the $3000 mark for Gold seems unlikely. Bearish sentiment is gaining momentum as more supply enters the market, driving prices lower. While bulls are still active and buying dips, as seen yesterday, the broader trend remains under pressure. We can expect occasional bounces even in a short-term bearish trend.

Increased volatility calls for wider stops, enabling broader target ranges. I intend to sell during rallies and buy on significant price drops, expecting a sideways trend. A selling opportunity could occur around 2924/29, with stops above 2938. The target for this trade is 2916 and 2904. This approach allows for better risk management and potential profit-taking. The strategy focuses on capitalizing on price fluctuations within the current market conditions.

For buying, there could be potential opportunities around the 2901/2896 range, with stops set below 2886 to manage risk effectively. The target for this trade would be the 2911 and 2919 levels, where we could see a continuation of upward momentum. However, if the price breaks below 2885, it would signal a short-term sell opportunity. In this case, the target for profit-taking would be at the 2870/65 support level, where the market could find additional support.

Given the current market conditions, it’s essential to approach these trades with caution and be prepared for potential volatility. The fluctuations in price make it crucial to manage stops and targets carefully to mitigate risks and maximize potential profits. As we continue navigating this phase of increased uncertainty, staying flexible and adjusting strategies as needed will be key to navigating the changing landscape. With wider stops and carefully considered entry and exit points, traders can better handle the current volatility while taking advantage of the potential price swings.