The financial world has hundreds of reliable assets you can trade, but one precious instrument stands out from the rest and has been one of the most popular options for traders of all levels for decades: gold (XAU).
Gold has always been at the heart of trading and remains a safe-haven asset in which even the largest institutions continue to place their trust. In these uncertain times, gold’s popularity is once again on the rise, and traders are studying the opportunities on the horizon.
If the next XAU breakout is anything like those of the past, we’ll be glad we recognized the warning signs and traded at the most opportune moment. When it comes to gold, news reports usually report the hype long after the best entry points have disappeared, but technical traders can predict trend reversals, rallies and crashes long before the media get wind of these changes. So consider the following indicators before your next XAU trade.
In this article, we will discover the three must-have indicators for trading gold using technical analysis.
Strifor Moving averages (MAs)
Moving averages available on Strifor broker is a very popular indicator for forecasting trends in gold and other assets. If you place a moving average on a chart and look at the previous month, you’ll see that the moving averages cross in places. Every time they crossed, the XAU reversed. The beginnings of a reversal are the best time for an entry point. Plot a moving average today and see if it’s the right time to trade gold.
Strifor Bollinger Bands
On the XAU chart, check whether the price is touching one of the outer bands of the Bollinger Bands. Contact with the lower band indicates a weakening trend, or even a future price rise. Contact with the upper band suggests a downward price reversal.
Fibonacci retracement
After tracing the Fibonacci levels, keep an eye on the primary level of 61.8% (0.618). This is known as the “golden number” or “golden mean”. Strifor Technical traders consider that if a retracement or price decline reaches this level and then slows down, the trend is likely to resume its original direction.
Conclusion
In addition to the mathematical properties of these three popular indicators available on Strifor.org, a self-fulfilling prophecy also comes into play. If the aforementioned indicators forecast a rise, countless traders will start buying gold, and this positive trading volume will lead to a rise in demand, and therefore in price.
Traders who detect signals early benefit most from an accurate forecast, which is why it’s a good idea to check the XAU chart regularly.
Another tip for gold traders: compare the highs and lows of the last few weeks with those of the last two years. If the price is low in both the short and long term, an epic opportunity could present itself.
Finally, given the growing uncertainty surrounding global currencies and economies, it’s not far-fetched to imagine that major investors will once again turn to the oldest safe-haven asset of all time. Before the last recession of 2008-2009, when property prices and equities were suffering major losses, gold briefly fell, then soared for three years. If it happens again, having an active, well-stocked Strifor account could be your greatest asset this year. Get ready to seize the next golden opportunity… Who knows? It may already have begun.