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Trade idea: Buy gold on ”good” risk reward
Steve O’Hare from First 4 Trading is looking to buy gold as it’s a trade that offers “good” risk reward.
Gold is holding near the USD 1300 level as a rally in global stocks has curbed demand for the metal, amid hopes the US Federal Reserve will stick to its monetary policy.
Janet Yellen, nominated to replace Ben Bernanke as Federal Reserve Chairman, has signaled that she’d continue the record stimulus program until the US economy gets stronger.
On a technical side, Steve says there is a bearish exhaustion creeping into gold and that the weekly bullish hammer candle is influencing a shift in sentiment. As a result, he plans to buy gold in front of USD 1285, to place a stop at USD 1250 and his targets are USD 1325, USD 1350 and USD 1375.
The Fed will release minutes of its latest meeting on 20 November.
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01:16 minutes
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