The gold price has risen sharply in recent months. Investors who invested in gold are now seeing nice profits. But how can you ensure you keep these gains? In this blog article we discuss the current technical analysis of gold and provide tips to protect your profits.
Gold breaks out above trend channel
On a weekly basis, the gold price recently broke out above the trend channel it has been in since late 2022. This is a positive signal and indicates an increase in purchasing power. However, it is important that this outbreak is confirmed in the coming weeks. This means that the gold price must remain above the boundary of the trend channel.
On a weekly basis, the precious metal recently broke out of the uptrend channel since fall 2022 (upper limit currently at $2,322). This is a very good sign and even indicates further momentum of the trend.
However, it is important to confirm the described breakout in the future – that is, to avoid the pullback in the mentioned trend channel.
Inner bar pattern: loss of dynamics
At this point it gets interesting, because last week the gold price simultaneously expressed a so-called inner bar. That is, the swing width of the past five days remained within the equivalent of the previous week, indicating a certain loss of momentum.
Placing Stop-Loss to protect profits
One way to protect your profits is to place a stop-loss order. This is an order that is automatically executed if the gold price falls below a certain level. In this case, you could place the stop-loss just below the upper limit of the trend channel.
If the upper trend channel boundary is broken again, this would also simultaneously resolve the discussed “inside week” downwards, making this level a short-term stop-loss to secure profits. However, this does not detract from the good long-term prospects of the precious metal.
Long-term prospects remain favorable
Despite the short-term moves, the long-term outlook for gold remains positive, supported by several factors that continue to drive demand for the precious metal.
Conclusion
Although recent developments in the gold market indicate some weakening of dynamics, the long-term prospects for the precious metal remain favorable. However, it is important to continue to monitor the market closely and implement appropriate strategies to protect profits in the event of a trend reversal.
Source: HSBC
How to profit from the gold price
Discover the shine of gold in a world full of possibilities. The gold price, an interplay of technical and fundamental factors, offers an exciting and potentially profitable landscape.
Whether you’re a risk-averse saver or an adventurous investor, there are countless ways to profit from the gold price. One of the most popular ways is to invest in physical gold through a reliable online platform such as GoldRepublic.
