Contents
Market Recap
Gold prices have experienced significant volatility in recent days, with spot gold trading around $3,180 per ounce as of May 17. While analysts remain cautiously bullish due to strong central bank demand and geopolitical tensions, technical indicators suggest weakening momentum. It is a strategic time to trade gold, especially through platforms like Exness, which offers competitive spreads and leveraged exposure to precious metals.Current Price Action and Trends
Price Level
Gold is currently oscillating between $3,164 and $3,180 per ounce, with a bearish short-term bias per CoinCodex’s May 18 prediction of $3,164.03.Trend
The bullish momentum has paused after hitting April’s all-time high of $3,500.05, with technical analysts noting a breakdown from parabolic patterns and overbought conditions. However, fundamental drivers like central bank purchases (particularly China’s sixth consecutive monthly reserve increase) and investor demand underpin medium-term optimism.Key Levels
- Support: $3,100 (immediate short-term floor) and $2,530-$2,500 (long-term critical zone).
- Resistance: $3,200 (near-term psychological barrier) and $3,500 (major psychological hurdle).
- Long-Term Target: Potential re-test of $3,500 if bullish momentum resumes post-correction.
Trading Strategy for XAU/USD
Entry Points
- Pullback Entry: Buy on dips to $3,100 with confirmation from the RSI reversing above 30.
- Breakout Entry: Short entry above $3,200 resistance if bearish momentum accelerates, targeting $3,164.
Risk Management
- Stop Loss (SL): Place 1.5-2% below entry (e.g., $3,070 for pullback entry; $3,140 for breakout short).
- Take Profit (TP): For longs, target $3,180-$3,200. For shorts, aim for $3,164-$3,150.
Key Indicators to Monitor
- RSI: A reading below 50 signals bearish momentum; reversal above 30 could suggest trend exhaustion.
- Moving Averages: 50-day (supportive trend) and 200-day (long-term bullish trajectory) validate direction.
Rationale for Strategy
- Bullish Drivers: Sustained central bank demand, geopolitical risks, and investor inflows into ETFs.
- Volatility: Monitor Fed speeches and China’s House Price Index for liquidity shifts.
Final Advice
Entry: Prioritize pullback longs ($3,100) as the dip aligns with oversold RSI levels. Avoid chasing breakouts without confirmation. Exit: Tighten TP to $3,180 if holding longs; for shorts, trail SL below $3,164. News Watch: React to macroeconomic events but base decisions on price action relative to $3,100-$3,200.Gold remains a high-risk, high-reward asset. While fundamentals support medium-term appreciation, short-term traders must respect technical barriers. Adjust position sizes to market volatility and never trade without a predefined exit strategy.
