Flight to safety
As the recent crises continues to unravel in Europe the flight to safety of the dollars around the world
has begun,which is evident in the run up in gold prices.
Here is a look the long term gold chart.
Gold has been making two head and shoulder pattern. One of them is a big pattern which has been in making for past 2 years and also has achieved most of its target, the target being 1300$/oz.
The smaller one also has achieved part of its target of 1234$/oz.
Now the best way to trade gold is to follow the trend which is UP
the best way to trade is to follow the 5DMA IE be long as long as gold is above 5 dma with the same acting as trailing stop loss. If the 5dma is broken on downside it may not be safe to take short positions as gold is in a uptrend. The uptrend will end once gold closes below its 20 day low
of 1125 $/oz.
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