Gold is setting up a text book Head and Shoulders pattern best viewed on the hourly charts below. Head and Shoulders are classic top formations. The Chart pattern has a neckline at $1280. Expect stops to be layered below this. The initial tech targets is the length of the pattern so $20 lower at $1260. Stops on shorts can be placed above the right shoulder at $1294.
The USD is starting to get a bid going into Jacksons Hole and overnight positive noise regarding Trumps tax policy also helping US yields and the USD. Follow through momentum on this will weigh on gold. The obvious risk to the trade is North Korean tensions resurfacing. While its all quiet on the Asian front the market cant hold the safe haven bid indefinitely. However it will make sense to take profits /partial profits/lower stops when given the opportunity as the market is still conditioned to buying dips. Short term however selling gold technically makes sense and with a market very long a washout is the risk. Bank 20 bux and buy some diamonds !
By August 23, 2017
Source: FXCharts