Trading Strategy for Gold on September 15, 2023
Gold prices have shown a persistent decline throughout the month, with XAU/USD reaching as low as $1,901 following the European Central Bank's (ECB) announcement regarding monetary policy. However, the precious metal has since rebounded, influenced by positive sentiments in equity markets, although it remains in the vicinity of $1,910.
Simultaneously, the US Dollar received a boost from a mix of economic data releases. On one hand, August witnessed a notable increase in retail sales, surpassing expectations with a 0.6% month-on-month rise compared to the anticipated 0.2%. Conversely, wholesale prices saw a greater-than-expected increase, with the August Producer Price Index (PPI) showing a 0.7% month-on-month and 1.6% year-on-year surge. However, despite the rise in inflation, investors remained unconvinced about the Federal Reserve's (Fed) inclination towards another interest rate hike. Subsequently, risk appetite took precedence, leading to an uneven impact on the demand for the US Dollar.
Trading Strategy:
Long Position (BUY) on XAU/USD:
Initiate a long (BUY) position in XAU/USD within the price range of $1,898 to $1,901.
Stop Loss (SL): Prudently place a stop-loss order at $1,896 to mitigate potential losses.
Take Profit Levels:
Take Profit 1 (TP1): Set the initial take-profit level at $1,915.
Take Profit 2 (TP2): Consider placing the second take-profit level at $1,920.
Take Profit 3 (TP3): Evaluate a third take-profit level at $1,925 to capture potential further gains.
Short Position (SELL) on XAU/USD:
Contemplate entering a short (SELL) position in XAU/USD when the price falls within the range of $1,919 to $1,921.
Stop Loss (SL): Prudently establish a stop-loss order at $1,924 to manage risks associated with this trade.
Take Profit Levels:
Take Profit 1 (TP1): Designate the initial take-profit level at $1,920.
Take Profit 2 (TP2): Consider setting the second take-profit level at $1,915.
Take Profit 3 (TP3): Contemplate a third take-profit level at $1,910 to capture potential further declines.
It is imperative to adhere to robust capital management principles, limiting risk exposure to 1% of one's trading account. Additionally, avoid committing more than 5% of your trading capital within the immediate 10 price levels. Always employ stop-loss orders (SL) to manage unforeseen market movements. Traders must stay vigilant and adjust their trading activities in line with their available capital.
Gold prices have shown a persistent decline throughout the month, with XAU/USD reaching as low as $1,901 following the European Central Bank's (ECB) announcement regarding monetary policy. However, the precious metal has since rebounded, influenced by positive sentiments in equity markets, although it remains in the vicinity of $1,910.
Simultaneously, the US Dollar received a boost from a mix of economic data releases. On one hand, August witnessed a notable increase in retail sales, surpassing expectations with a 0.6% month-on-month rise compared to the anticipated 0.2%. Conversely, wholesale prices saw a greater-than-expected increase, with the August Producer Price Index (PPI) showing a 0.7% month-on-month and 1.6% year-on-year surge. However, despite the rise in inflation, investors remained unconvinced about the Federal Reserve's (Fed) inclination towards another interest rate hike. Subsequently, risk appetite took precedence, leading to an uneven impact on the demand for the US Dollar.
Trading Strategy:
Long Position (BUY) on XAU/USD:
Initiate a long (BUY) position in XAU/USD within the price range of $1,898 to $1,901.
Stop Loss (SL): Prudently place a stop-loss order at $1,896 to mitigate potential losses.
Take Profit Levels:
Take Profit 1 (TP1): Set the initial take-profit level at $1,915.
Take Profit 2 (TP2): Consider placing the second take-profit level at $1,920.
Take Profit 3 (TP3): Evaluate a third take-profit level at $1,925 to capture potential further gains.
Short Position (SELL) on XAU/USD:
Contemplate entering a short (SELL) position in XAU/USD when the price falls within the range of $1,919 to $1,921.
Stop Loss (SL): Prudently establish a stop-loss order at $1,924 to manage risks associated with this trade.
Take Profit Levels:
Take Profit 1 (TP1): Designate the initial take-profit level at $1,920.
Take Profit 2 (TP2): Consider setting the second take-profit level at $1,915.
Take Profit 3 (TP3): Contemplate a third take-profit level at $1,910 to capture potential further declines.
It is imperative to adhere to robust capital management principles, limiting risk exposure to 1% of one's trading account. Additionally, avoid committing more than 5% of your trading capital within the immediate 10 price levels. Always employ stop-loss orders (SL) to manage unforeseen market movements. Traders must stay vigilant and adjust their trading activities in line with their available capital.
