Trade view /
04 October 2016 at 8:39 GMT
The combination of a slightly stronger dollar tone, higher US bond yields and solid risk appetite kept precious metals prices on the defensive on Monday. Silver dipped and has broken support at $19.00 per ounce while gold sank further towards key support near $1,300.
Whilst, our longer term (Bullish flag) and intra-day trade (Key support) ideas continue with a dip buying at approach, if support breaks then there would be a short term selling opportunity.
Gold prices have been in a corrective channel since early July, with levels above $1,300/oz acting as solid support. We expect a fast move if this support breaks but also expect downside to be limited by an underlying continued safe haven bid and the bottom of the corrective channel.
Fibonacci retracement levels will act as targets for a break. We expect any extended move to stall in front of $1,250.
Management and risk description
Once 1st target is reached take partial profits and reset shorts on a reaction back to $1,300. A further drive lower show target $1,265-70 before a final swing to $1,252.
Entry: Sell a break of $1,300/oz
Stop: A move back above $1,325
Target: Early target of $1,287, $1,267 & $1,252
Time horizon: 2-4 weeks
Corrective channel & fibonacci retracements
Source: Saxo Bank. Create your own charts with Saxo Trader click here to learn more
Bullish flag on long term chart
Source: SAXO Bank
— Edited by Clemens Bomsdorf
Non-independent investment research disclaimer applies. Read more