Good day traders! Here is a trading idea for gold.
After a long growth and an update of the yearly highs, gold quotes dropped sharply by 3,500 pips in just 6 hours.
With such a situation, short gold to a 50% pullback from yesterday's initiative:
The initiative came after Powell's statements regarding the US economy, which is forecast to recover steadily during the second half of the year, provided that there is no second wave of Covid-19. According to Powell, the Fed is prepared to use more tools to stimulate the US economy if necessary. With such news, gold quotes dropped sharply on Monday.
Another reason for the decline are the current studies for the coronavirus vaccine. According to US analysts, metal, as a refuge, lost demand.
"Gold lost some profit, reflecting some change in safe haven flows amid hopes for a vaccine," Daniel Ghali, analyst at TD Securities said in an email. "Since the vaccine is the primary means of resolving future economic problems, this will eliminate the need for a long period during which the Fed and other central banks will provide unprecedented incentives."
Continue shorting gold in the US session. If yesterday's low is broken, close 2/3 of the position and leave 1/3 of "breakeven" until 1660.
Good luck in trading and control the risks!
The material has been provided by InstaForex Company - www.instaforex.com