Gold – The Tug-of-War Continues

25 Jun - Gold Daily Forex Chart

(Click on image for larger view)

Hi All,

Just a quick update on my favourite metal.

On the 29th May (see article), Gold broke out of a fairly significant consolidation triangle. If you have been following my posts, you would also know that I’m a big advocate that break outs gives us a higher probability trade.


Since then I have been looking for a short continuation set up. Having said that, I cannot ignore the fact that we are in a clear range market and no one knows how long a Tug-of-War between the buyers and sellers can last. This Tug-of-War was mentioned on 20th Mar (see article). Moving forward, in my commentary last Monday (see article), I thought price was ready to move lower – but the market did not agree with me. Instead it decided to move higher.

You can see why I call this a Tug-of-War, can’t you? The market becomes even more difficult to measure than usual and clear directions are hard to pick due to the choppiness.

Another Test

25 Jun - Gold 4HR Forex Chart

(Click on image for larger view)

Yesterday was another test of price action when I found that price was testing a soft (resistance) level again ~1325 (see chart at top of page). In fact, looking at the 4 hour chart (above), price gave me a smaller triangle at that level. As price moved higher, I took a long breakout trade but moving my stop to break even where I see fit. When I woke up this morning, I found a closed position as price failed to move with conviction.

While this was not a winner, breaking even was indeed a good trade.

25 Jun - Gold Daily Forex Chart 2

(Click on image for larger view)

Looking at price action now, price has given me a nice Inside Bar False Break set up. This is another of my favourites and I will happily wait for the set up to materialise. If it does happen, my near term target will be the previous resistance (now support) around ~1280. But if price moves higher, then I shall sit aside and wait for more price action before I make a decision.

If you have any questions or comments, make sure to post them in the box below. Thank you and have trading.


If you are interested to understand more of my view on Market Psychology (see explanation), including the idea of Tug-of-War and Inside Bar False Break, make sure to get your copy of “How to Read Price Action?” (click here) today. 


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