How to Trade Gold’s Potential Surge on Technical Breakout

<a href="https://admiralmarkets.com/analytics/traders-blog/trading-idea-gold-technical-breakout"><picture class="lozad" data-iesrc="https://fxmedia.s3.amazonaws.com/articles/how_to_trade_gold.jpeg" data- data- data-alt="how to trade gold" data-height="306" data-width="668"><source type="image/webp" media="(min-width: 640px)" srcset="https://dqvh7oj3vu3ch.cloudfront.net/720x,webp/fxmedia.s3.amazonaws.com/articles/how_to_trade_gold.jpeg"></source><source type="image/webp" media="(max-width: 639px)" srcset="https://dqvh7oj3vu3ch.cloudfront.net/375x,webp/fxmedia.s3.amazonaws.com/articles/how_to_trade_gold.jpeg"></source></picture></a>After gold’s 78% surge higher from August 2018 to its record high in August 2020, it has spent much of the past year and a half consolidating in a symmetrical triangle trading range. The two main forces currently affecting the gold price are related to the Federal Reserve interest rate policy and the demand for gold as a hedge against inflation. A shift in this balance is likely to cause a technical breakout in the gold price chart with the potential for gold to surge more than 10% towards its record high. Keep on reading to learn how to trade the potential of this gold price forecast. <table border="1">
<tbody>
<tr>
<td>Market:</td>
<td>Gold vs US Dollar</td>
</tr>
<tr>
<td>Trade.MT4 / Trade.MT5 Symbol:</td>
<td><a href="https://admiralmarkets.com/start-trading/contract-specifications/instrument/gold" target="_blank" rel="noreferrer noopener">GOLD</a> </td>
</tr>
<tr>
<td>Date of Idea:</td>
<td>9 February 2022</td>
</tr>
<tr>
<td>Time Line:</td>
<td>3 – 4 weeks</td>
</tr>
<tr>
<td>Entry Level:</td>
<td>1,854.00</td>
</tr>
<tr>
<td>Stop Loss Level:</td>
<td>1,780.00 </td>
</tr>
<tr>
<td>Target Level:</td>
<td>1,950.00 </td>
</tr>
<tr>
<td>Position Size for Trade.MT4 / Trade.MT5 Account:</td>
<td>Max 5%</td>
</tr>
<tr>
<td>Risk:</td>
<td>High</td>
</tr>
</tbody>
</table><ul>
<li>The <a href="https://admiralmarkets.com/start-trading/account-types" target="_blank" rel="noopener">Trade.MT4</a> and <a href="https://admiralmarkets.com/start-trading/account-types" target="_blank" rel="noopener">Trade.MT5</a> accounts allow you to speculate on the price direction of metals such as gold using CFDs. This means you can trade long and short to potentially profit from rising and falling prices. Learn more about CFDs in this <a href="https://admiralmarkets.com/education/articles/forex-basics/what-is-cfd-trading-contracts-for-difference-explained" target="_blank" rel="noopener">How to Trade CFDs</a> article. </li>
<li>The <a href="https://admiralmarkets.com/start-trading/admiral-invest-stocks-and-etfs" target="_blank" rel="noreferrer noopener">Invest.MT5</a> account allows you to buy real stocks and shares from 15 of the largest stock exchanges in the world. Investors may opt to purchase <a href="https://admiralmarkets.com/education/articles/shares/gold-mining-stocks" target="_blank" rel="noreferrer noopener">gold mining stocks</a> or gold ETFs (<a href="https://admiralmarkets.com/education/articles/etfs/what-are-etfs" target="_blank" rel="noreferrer noopener">exchange traded funds</a>) which could benefit from higher gold prices. </li>
</ul><div>
<div data-symbol="COMEX:GC1!" data-interval="D"></div>
<div>Source: <a rel="noopener" href="https://www.tradingview.com/" target="_blank">TradingView</a></div>
</div>All trading is high risk and you can lose more than you risk on a trade. Never invest more than you can afford to lose as some trades will lose and some trades will win. Start small to understand your own risk tolerance levels or practice on a <a href="https://admiralmarkets.com/start-trading/forex-demo" target="_blank" rel="noopener">demo account</a> first to build your knowledge before investing. <a href="https://admiralmarkets.com/start-trading/contract-specifications/instrument/gold" target="_blank" rel="noopener"><a href="https://admiralmarkets.com/analytics/traders-blog/trading-idea-gold-technical-breakout"><picture class="lozad" data-iesrc="https://fxmedia.s3.amazonaws.com/articles/buy_gold.jpeg" data- data- data-alt="buy gold" data-height="204" data-width="668"><source type="image/webp" media="(min-width: 640px)" srcset="https://dqvh7oj3vu3ch.cloudfront.net/720x,webp/fxmedia.s3.amazonaws.com/articles/buy_gold.jpeg"></source><source type="image/webp" media="(max-width: 639px)" srcset="https://dqvh7oj3vu3ch.cloudfront.net/375x,webp/fxmedia.s3.amazonaws.com/articles/buy_gold.jpeg"></source></picture></a></a><h2 aria-level="2">Why Invest in Gold? </h2>Gold is one of the oldest forms of currency in the world and its price is widely watched among financial traders and investors around the world. There are a variety of reasons why investors would choose to invest in gold. <h3 aria-level="3">Gold’s Safe Haven Status </h3>Gold is often seen as a safe haven in times of economic uncertainty. The world’s most famous investor, Warren Buffett, <a rel="nofollow noopener" href="https://www.cnbc.com/2020/04/20/coronavirus-why-gold-is-seen-as-a-safe-haven-investment-in-a-crisis.html" target="_blank">said</a> that “gold is a way of going long on fear.” With global stock markets experiencing significant declines at the start of the year, the demand for gold has increased. Investors tend to see gold as a safe haven due to its store of value – it is liquid to buy and sell instantly but it has a finite supply which makes it more valuable. <h3 aria-level="3">Gold as an Inflation Hedge </h3>Research from the <a rel="nofollow noopener" href="https://www.gold.org/goldhub/research/beyond-cpi-gold-as-a-strategic-inflation-hedge" target="_blank">World Gold Council</a> shows that gold can act as a hedge against inflation over the long term. With inflation running near record highs last year, it is expected the Federal Reserve will increase interest rates five times this year. However, <a rel="nofollow noopener" href="https://www.cnbc.com/2022/02/07/gold-has-remained-steady-as-stocks-and-bitcoin-have-plunged.html" target="_blank">according</a> to investment bank UBS, there is “elevated demand [in gold] for portfolio hedges” citing concerns that higher interest rates will cause growth to falter. The bank’s average gold price forecast for this year is $1,925. <h3 aria-level="3">Gold as a Long Term Investment </h3>Many investors may choose to invest in gold exchange traded funds (ETFs). These are funds that track the underlying price of gold by either holding physical gold in vaults or through purchasing gold futures contracts. You can learn more about these in the <a href="https://admiralmarkets.com/education/articles/general-trading/cfds-vs-futures-trading" target="_blank" rel="noopener">Complete Guide in How to Trade Futures</a>. Investors may also choose to analyse the performance of gold mining stocks. As the price of gold rises this can translate into better profit margins for gold miners. However, like with any stock, there are other factors to take into consideration that can affect the bottom line. With Admirals you can trade gold futures contracts, gold mining stocks and gold exchange traded funds, or receive the performance of gold from an Admirals Wallet Gold account with zero holding costs. <h3 aria-level="3">Gold for Short Term Speculation </h3>Due to gold’s volatility, there are traders who will use short term trading strategies to speculate on the price direction of gold. This can be done using CFDs (contracts for difference) which allow you to trade long and short and potentially profit from rising and falling prices. You can learn more about CFD trading strategies in this <a href="https://admiralmarkets.com/education/articles/forex-strategy/trading-strategies" target="_blank" rel="noopener">Trading Strategies Guide for 2022.</a> <h2 aria-level="2">Gold Price Forecast 2022 </h2>Currently, the technical chart analysis for gold shows that its price is trading inside of a symmetrical triangle trading range. This is the price pattern showing a series of lower highs with a descending resistance line and higher lows with an ascending support line, as shown in the gold price chart below. <a href="https://admiralmarkets.com/analytics/traders-blog/trading-idea-gold-technical-breakout"><picture class="lozad" data-iesrc="https://fxmedia.s3.amazonaws.com/articles/gold_price_chart.png" data- data- data-alt="gold price chart" data-height="888" data-width="1916"><source type="image/webp" media="(min-width: 640px)" srcset="https://dqvh7oj3vu3ch.cloudfront.net/720x,webp/fxmedia.s3.amazonaws.com/articles/gold_price_chart.png"></source><source type="image/webp" media="(max-width: 639px)" srcset="https://dqvh7oj3vu3ch.cloudfront.net/375x,webp/fxmedia.s3.amazonaws.com/articles/gold_price_chart.png"></source></picture></a>Source: Admirals <a href="https://admiralmarkets.com/trading-platforms/metatrader-5" target="_blank" rel="noopener">MetaTrader 5</a>, GOLD, Weekly – Data range: from 15 Apr 2018 to 8 Feb 2022, performed on 8 Feb 2022 at 7:00 pm GMT. Please note: Past performance is not a reliable indicator of future results. Last five-year performance: 2021 = -3.51%, 2020 = +24.42%, 2019 = +18.87%, 2018 = -2.14%, 2017 = +13.68%. While the gold price has tried to break through this symmetrical triangle on multiple occasions in the past it has failed to continue to trend. We are now moving towards the smaller end of the symmetrical triangle price pattern where a breakout is more likely – especially with the increase in volatility expected this year. <h2 aria-level="2">An Example Trading Idea for Gold CFDs</h2>Based on the analysis above, if the price of gold can break through the top of the symmetrical triangle pattern and continue its long-term trend higher, an example trading idea for the Gold vs US dollar CFD could be as follows: <ul>
<li data-leveltext="%1." data-font="Calibri" data-list aria-setsize="-1" data-aria-posinset="1" data-aria-level="1">Buy the <a href="https://admiralmarkets.com/start-trading/contract-specifications/instrument/gold" target="_blank" rel="noopener">Gold CFD</a> on a break of the last weekly candle testing the top of the symmetrical triangle pattern at 1,854.00. </li>
<li data-leveltext="%1." data-font="Calibri" data-list aria-setsize="-1" data-aria-posinset="2" data-aria-level="1">Place a protective stop loss on a break of the same weekly candle’s low at 1,780.00. </li>
<li data-leveltext="%1." data-font="Calibri" data-list aria-setsize="-1" data-aria-posinset="3" data-aria-level="1">Place a target at the next major level of horizontal resistance around 1,950.00. </li>
<li data-leveltext="%1." data-font="Calibri" data-list aria-setsize="-1" data-aria-posinset="4" data-aria-level="1">Keep your risk small at a maximum of 5% of your total account. </li>
<li data-leveltext="%1." data-font="Calibri" data-list aria-setsize="-1" data-aria-posinset="5" data-aria-level="1">Time Line = 3 – 4 weeks. </li>
<li data-leveltext="%1." data-font="Calibri" data-list aria-setsize="-1" data-aria-posinset="6" data-aria-level="1">If you traded with a position size of 0.01 lots, then:
<ul>
<li data-leveltext="%2." data-font="Calibri" data-list aria-setsize="-1" data-aria-posinset="1" data-aria-level="2">If your target is reached = $96.00 profit </li>
<li data-leveltext="%2." data-font="Calibri" data-list aria-setsize="-1" data-aria-posinset="2" data-aria-level="2">If your stop loss is reached = -$74.00 loss </li>
</ul>
</li>
</ul>It’s wise to remember that the price of gold is unlikely to go up in a straight line and it may even go much further down before it rises, especially considering how volatile gold price can be. Therefore, be sure to exercise good risk management which is one of the most important aspects of trading successfully. You should always know how much you could potentially lose on a trade and the risks involved. You can do this using the Admirals <a href="https://admiralmarkets.com/start-trading/trading-calculator" target="_blank" rel="noopener">Trading Calculator</a> for the Trade.MT4 account, as shown below: <a href="https://admiralmarkets.com/analytics/traders-blog/trading-idea-gold-technical-breakout"><picture class="lozad" data-iesrc="https://fxmedia.s3.amazonaws.com/articles/gold_price_calculator.PNG" data- data- data-alt="gold price calculator" data-height="744" data-width="910"><source type="image/webp" media="(min-width: 640px)" srcset="https://dqvh7oj3vu3ch.cloudfront.net/720x,webp/fxmedia.s3.amazonaws.com/articles/gold_price_calculator.PNG"></source><source type="image/webp" media="(max-width: 639px)" srcset="https://dqvh7oj3vu3ch.cloudfront.net/375x,webp/fxmedia.s3.amazonaws.com/articles/gold_price_calculator.PNG"></source></picture></a>Source: <a href="https://admiralmarkets.com/start-trading/trading-calculator" target="_blank" rel="noopener">Admirals Trading Calculator </a>Another factor to consider is the cost of trading gold CFDs. These include: <ul>
<li data-leveltext="" data-font="Symbol" data-list aria-setsize="-1" data-aria-posinset="1" data-aria-level="1">Spread. This is the difference between the buy price and the sell price of an instrument.
<ul>
<li data-leveltext="" data-font="Symbol" data-list aria-setsize="-1" data-aria-posinset="1" data-aria-level="1">The Admirals typical spread on gold is only 0.20 USD! </li>
</ul>
</li>
<li data-leveltext="" data-font="Symbol" data-list aria-setsize="-1" data-aria-posinset="1" data-aria-level="1">Commission. This is the cost to make a buy and sell transaction.
<ul>
<li data-leveltext="" data-font="Symbol" data-list aria-setsize="-1" data-aria-posinset="1" data-aria-level="1">From the Admirals Trade.MT4 and Trade.MT5 account there is ZERO commission to pay to buy or sell gold CFDs. </li>
</ul>
</li>
<li data-leveltext="" data-font="Symbol" data-list aria-setsize="-1" data-aria-posinset="1" data-aria-level="1">Swaps. This is the overnight fee to roll your position over to the next day.
<ul>
<li data-leveltext="" data-font="Symbol" data-list aria-setsize="-1" data-aria-posinset="1" data-aria-level="1">The current swap fee for the gold CFDs from the Trade.MT4 account is –16.17 for long positions and –14.92 for short positions. </li>
</ul>
</li>
</ul>You can find more details from the Admirals <a href="https://admiralmarkets.com/start-trading/contract-specifications/instrument/gold" target="_blank" rel="noopener">Contract Specification</a> page. <h2 aria-level="2">How to Trade Gold CFDs in 4 Steps </h2>You can trade Gold CFDs from the Trade.MT4 or Trade.MT5 accounts using the four-step process outlined below. <ol>
<li data-leveltext="%1." data-font="ＭＳ明朝" data-list aria-setsize="-1" data-aria-posinset="1" data-aria-level="1"><a href="https://admiralmarkets.com/signup" target="_blank" rel="noopener">Open an account</a> with Admirals to access the Trader’s Room. </li>
<li data-leveltext="%1." data-font="Calibri" data-list aria-setsize="-1" data-aria-posinset="2" data-aria-level="1">Click on Trade on one of your live or demo accounts to open the web platform or download the MetaTrader 4 or MetaTrader 5 desktop platform. </li>
<li data-leveltext="%1." data-font="Calibri" data-list aria-setsize="-1" data-aria-posinset="3" data-aria-level="1">Search for GOLD at the bottom of the Market Watch window and drag the symbol onto the chart. </li>
<li data-leveltext="%1." data-font="Calibri" data-list aria-setsize="-1" data-aria-posinset="4" data-aria-level="1">Use the one-click trading feature, or right-click and open a trading ticket to input your trade size, stop loss and take profit level. </li>
</ol><a href="https://admiralmarkets.com/analytics/traders-blog/trading-idea-gold-technical-breakout"><picture class="lozad" data-iesrc="https://fxmedia.s3.amazonaws.com/articles/gold_trading_ticket.PNG" data- data- data-alt="gold trading ticket" data-height="967" data-width="1797"><source type="image/webp" media="(min-width: 640px)" srcset="https://dqvh7oj3vu3ch.cloudfront.net/720x,webp/fxmedia.s3.amazonaws.com/articles/gold_trading_ticket.PNG"></source><source type="image/webp" media="(max-width: 639px)" srcset="https://dqvh7oj3vu3ch.cloudfront.net/375x,webp/fxmedia.s3.amazonaws.com/articles/gold_trading_ticket.PNG"></source></picture></a>Source: <a href="https://admiralmarkets.com/trading-platforms/metatrader-5" target="_blank" rel="noreferrer noopener">Admirals MetaTrader 5 Desktop</a>. Past performance is not a reliable indicator of future results, or future performance. Click on the banner below to trade gold today! ▼▼▼ <a href="https://admiralmarkets.com/start-trading/contract-specifications/instrument/gold" target="_blank" rel="noopener"><a href="https://admiralmarkets.com/analytics/traders-blog/trading-idea-gold-technical-breakout"><picture class="lozad" data-iesrc="https://fxmedia.s3.amazonaws.com/articles/buy_gold-1.jpeg" data- data- data-alt="buy gold" data-height="204" data-width="668"><source type="image/webp" media="(min-width: 640px)" srcset="https://dqvh7oj3vu3ch.cloudfront.net/720x,webp/fxmedia.s3.amazonaws.com/articles/buy_gold-1.jpeg"></source><source type="image/webp" media="(max-width: 639px)" srcset="https://dqvh7oj3vu3ch.cloudfront.net/375x,webp/fxmedia.s3.amazonaws.com/articles/buy_gold-1.jpeg"></source></picture></a></a><h2 aria-level="2">Do You See Gold Moving Differently? </h2>Remember that all analytics and trading ideas are based on the personal view and experience of the author. If you believe there is a higher chance the gold price will lower, then you can also trade <a href="https://admiralmarkets.com/education/articles/general-trading/short-selling" target="_blank" rel="noreferrer noopener">short</a> from a CFD (Contracts for Difference) trading account which Admirals also provide. <h2 aria-level="2">Prefer to Invest in Gold? </h2>If you prefer to invest in gold and want to try and capitalise on the performance of gold prices then you can do so with Admirals too! The <a href="https://admiralmarkets.com/products/admirals-wallet" target="_blank" rel="noopener">Admirals Wallet</a> Gold Account allows you to receive the performance of gold with zero holding costs. All you need to do is transfer your investment capital (US dollars, euros, British pounds, etc), to the gold account from the Admirals <a href="https://admiralmarkets.com/education/articles/trading-software/traders-room-tutorial" target="_blank" rel="noopener">Trader’s Room</a> and then convert it back whenever you are ready. Open an account today and see all the ways you can try to capitalise on the movement in gold today! <div><div>Open a Live AccountTrade the Live Markets and Trade Efficiently<a target="_blank" href="https://admiralmarkets.com/start-trading">TRADE NOW</a></div><div><a target="_blank" href="https://admiralmarkets.com/start-trading"><a href="https://admiralmarkets.com/analytics/traders-blog/trading-idea-gold-technical-breakout"><picture class="lozad" data-iesrc="https://dce5jani6jm7e.cloudfront.net/data/education/articles/stocks.svg" data- data- data-alt="Open a Live Account" data-height="" data-width=""><source type="image/webp" media="(min-width: 640px)" srcset="https://dqvh7oj3vu3ch.cloudfront.net/720x,webp/dce5jani6jm7e.cloudfront.net/data/education/articles/stocks.svg"></source><source type="image/webp" media="(max-width: 639px)" srcset="https://dqvh7oj3vu3ch.cloudfront.net/375x,webp/dce5jani6jm7e.cloudfront.net/data/education/articles/stocks.svg"></source></picture></a></a></div></div> INFORMATION ABOUT ANALYTICAL MATERIALS: The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admirals’ investment firms operating under the Admirals trademark (hereinafter “Admirals”) Before making any investment decisions please pay close attention to the following: <ul>
<li data-leveltext="" data-font="Symbol" data-list aria-setsize="-1" data-aria-posinset="1" data-aria-level="1">This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research. </li>
<li data-leveltext="" data-font="Symbol" data-list aria-setsize="-1" data-aria-posinset="2" data-aria-level="1">Any investment decision is made by each client alone whereas Admirals shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content. </li>
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<li data-leveltext="" data-font="Symbol" data-list aria-setsize="-1" data-aria-posinset="4" data-aria-level="1">The Analysis is prepared by an independent analyst, Jitan Solanki (analyst), (hereinafter “Author”) based on their personal estimations. </li>
</ul><ul>
<li data-leveltext="" data-font="Symbol" data-list aria-setsize="-1" data-aria-posinset="1" data-aria-level="1">Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admirals does not guarantee the accuracy or completeness of any information contained within the Analysis. </li>
<li data-leveltext="" data-font="Symbol" data-list aria-setsize="-1" data-aria-posinset="2" data-aria-level="1">Any kind of past or modelled performance of financial instruments indicated within the content should not be construed as an express or implied promise, guarantee or implication by Admirals for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed. </li>
<li data-leveltext="" data-font="Symbol" data-list aria-setsize="-1" data-aria-posinset="3" data-aria-level="1">Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, please ensure that you fully understand the <a href="https://admiralmarkets.com/risk-disclosure">risks involved. </a></li>
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How to Trade Gold’s Potential Surge on Technical Breakout

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