Easing of N.Korea tensions brings short-term gold bear relief



Our long-term outlook for gold remains bullish, with price action breaking the long-term downward trending resistance and prices remain above that level. The market remains is now contained within an ascending triangle. (Chart 1)

An evening doji star formation on the daily chart signifies a reversal from the recent upward move, which stalled just in front of key resistance at $1,295/oz. A potential correction towards $1,250 would not significantly affect the upward potential. (Chart 2)

The correction lower should accelerate if prices manage to break the near-term upward trending support and four-hour Ichimoku cloud support. (Chart 3)

My previous trade idea on gold fell short of reaching the $1,295/oz target ($1,292 high). Upside momentum stalled after the easing of tensions between the US and North Korea. Although I expect this situation to flare up again, there seems to be a fair risk/reward selling opportunity in the short term.

Entry: We look to sell at current levels and into rallies in front of $1,275/oz

Stop: A break above $1,280

Targets: $1,260 & $1,250

Time horizon: one week

Weekly XAUUSD chart with triangle (in red) and broken long-term downward resistance

XAUUSD daily chart highlighting 50-day moving average and Ichimoku support

XAUUSD 4-Hour chart with short-term trend support

Source: SaxoTrader

— Edited by John Acher

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