Part four in this week's guest trader series
Martin is a professional trader in Bulgaria who joins us this week to share how he sees the market. On Monday he shared the 8 principles he trades by. Then on Tuesday and Wednesday he shared trade ideas on the yen. Today he looks at gold.
Gold is on my watchlist for today. As big players returned to the markets after their holidays, they pressed the price down, as expected.
Price covered the gap, but buyers are moving in again, pushing the price up. My intentions are to buy gold on the next opening, because the price tested successfully the diagonal (white circle area) and currently holds firm on the SP zone and 38.2 Fibonacci (green zone). My entry will be executed if the price manages to close circa 1550 - 1551, pacing my stop loss at 1520.38.
Gold continues to be backed up by fundamentals and seasonality. January is a strong month for the precious metal. Lower interest rates continue to divert money flows to gold from bonds as not so as an yield asset, but as protection asset against risks and inflation. I am expecting central banks to continue expanding their stacks of gold as well this year.
With monetary policy currently on hold from the Fed and the global central banks, my expectations for gold is to continue to appreciate in the near - term horizon. Gold will attract more money flows as rates are kept lower 'till their next rate and monetary policy decision and as seen in the last couple of months, gold correlates with the major US indexes.
Monetary conditions are providing the support for gold even when cyclicals and risky assets rise.
Check back with you tomorrow.
