Contents
Market Recap
Gold trading can be highly rewarding when executed through reputable platforms like Exness, which offers tight spreads and reliable execution. Over the past few days, gold (XAU/USD) has shown volatility, influenced by Federal Reserve policy speculation and shifting risk sentiment. Prices rebounded slightly in late May but face potential resistance ahead of June’s economic data releases and central bank decisions.Current Price Action and Trends
Price Level:
Gold is trading near $3,314.40 per ounce, reflecting a 25.31% year-to-date gain. Recent price action suggests consolidation after a sharp rally.Trend:
A short-term bullish correction is underway, though analysts anticipate a potential reversal in early June. Macro drivers include US dollar weakness and expectations of slower Fed rate hikes.Key Levels:
- Recent swing low: $3,280 (May 28 recoil after rally)
- Major resistance: $3,350 (psychological barrier)
- Long-term target: $3,400 (if bullish momentum sustains)
Support:
$3,280 (May 28 low) and $3,260 (previous swing low)Resistance:
$3,320 (near-term) and $3,350 (critical psychological barrier)Long-Term Target:
$3,400 (potential if Fed signals dovishness)Trading Strategy for XAU/USD
Entry Points
- Pullback Entry: Buy on dips toward $3,280 with a bullish RSI divergence. Target a 1:2 risk-reward ratio.
- Breakout Entry: Enter long above $3,320 if price closes beyond this level with increasing volume.
Risk Management
- Stop Loss (SL): Place 1.5% below entry (e.g., $3,260 if entering at $3,300 for a 4-pip risk).
- Take Profit (TP):
- First TP: $3,320 (2-pip high-frequency profit)
- Second TP: $3,350 (remaining position)
Key Indicators to Monitor
- RSI: Above 65 = overbought territory; look for momentum decay. Below 40 = oversold buying opportunity.
- Moving Averages: 50-period SMA ($3,295) and 200-period SMA ($3,220). A bullish crossover could signal sustained upside.
Rationale for Strategy
- Bullish Drivers:
- Potential Fed easing signals
- Safe-haven demand amid equity market uncertainty
- Seasonal strength in June (historical data shows March lows often precede summer rallies)
- Volatility: Monitor ATR (14-period) for breakouts. Higher volatility favors aggressive entries; low ATR suggests consolidation.
Final Advice
If the price tests $3,280 with bullish RSI divergence, open long positions using a tight stop loss. Close half the position at $3,320 if reached, and let the remainder run toward $3,350. Avoid counter-trend entries below $3,280—patience is key in this volatile environment.Always trade with Exness, as their trading conditions and liquidity suit gold’s high volatility profile. Stay disciplined, and never risk more than 1% of your account per trade.
