The strength in USD was responsible for huge selling in Gold, as the dollar index was seen above 77 level today. So not only Gold but also Silver and Crude were hit by this USD strength. We see that Gold is trading near its strong support zone of 1694 level so traders can accumulate gold at this level for short term targets as 1746 and then 1777 levels. Demand for this yellow metal is still present in market and most of the traders are bullish. So this fall can be a very good entry point to take long positions in gold. Also in case of uncertainty traders will surely be attracted towards gold. We believe there is high probability that gold will be trading higher again in near term. Taking a look at slow stochastic we see a buy crossover forming on the 30 minutes chart, so this can be a good entry area for this trade setup.
Gold Trading Strategy for Short term: We recommend traders to add long positions on Gold near 1694 level for short term target as 1746 and 1777 levels. A protective stop loss order should also be placed below 1687 level.
Risk reward ratio is excellent here but still we advice traders that this strategy carries significant amount of risk, so take small positions only.