Gold (XAUUSD) Going Parabolic ?The chart suggests that Gold (XAUUSD) has been rising steadily in the past year.
Gold in general acts as hedge against inflation and uncertainty.
There can be further upthrust due to some catalyst. In general one should not short a parabolic move prematurely as it can keep moving upwards. Only with defined signals one must try that. Shorting in general is very difficult. Nevertheless if one wants to trade a parabolic move, they can long it with a small position so that the risk reward is great. Commit only that much which you are ready to lose with appropriate stop loss.
What effects the price of Gold in general -
1. Geopolitical events - e.g.
Ukraine War
Gaza War
Tariff Wars
2. Dollar Index - Post election DXY rose steadily causing selloff in emerging markets. Though Gold fell initially but it steadied and started moving upwards later. Since gold correlates negatively in general with DXY, it's important to keep a tab on it.
3. Demand and supply of physical gold.
Buying and selling by Central Banks around the world
Mining output
Demand by consumers
4. Monetary policies of Central Banks of USA, China, Japan etc
5. Trading in derivatives
PS - This is not an exhaustive list of course.
So in order to understand and speculate on Gold one must have an updated macro view and chart reading capacity.
Trade Safe
Long