The Gold (XAUUSD) position from yesterday (January 26) quickly ran to target 1 at 1182.80 for a USD17.00 move (equivalent to 1700 pips). Yesterday I wrote “The risk off rally in stocks and the six day rejection of the 1220 level offered a SHORT position in GOLD. The entry in XAUUSD was 1199.80, with Target 1 beyond the 20 DMA at the 38.2 Fibonacci level of the recent rise from the low at 1121.38 at 1182.80. Target 2 is the key 1170.00 pivot area and the 50.0 Fibonacci level. The 1170.00 area was important when I last traded Gold (December 1) on its break of this level it went to my target 1 at 1140 but missed target 2 1120 by little more than 1 USD”.
The risk appetite is very much on as funds move from bonds to equities in anticipation of the spending spree that is coming from the new USA administration. Yesterday it announced that it had a list of 50 key infrastructure projects that would cost in excess of 137 billion USD and with the mantra being “Buy American, Hire American” the exuberance of the equity markets are understandable. This combined with some positive earnings being announce across all sectors the stock rally may just be getting established. Safe havens such as non-yielding Gold bullion, the Swiss franc and the Japanese yen are taking a backseat for now.
/ has had a 100% start to 2017 with five trades achieving both Targets 1 and 2 and a four trades hitting target 1 for a total net gain of 3344 pips.
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