Weak Dollar since yesterday, after European Central Bank (ECB) disappointed big time over stimulus has been good for gold and gold seems to be in a position to gain further over weak Dollar.
Today's NFP would be critical for Gold.
As shown in figure, Gold has been in a downward sloping channel since April 2013, and just before yesterday's surprise from ECB, Gold was back testing the channel floor. Though, it is not a certainty, that gold will bounce back from here, nevertheless there is an opportunity both in the very short term and over a little longer horizon.
Moreover risk reward is very attractive.
Trade idea
Buy Gold at current price $1061/troy ounce, targeting $1090/troy ounce area in the short run and maintain stop loss around recent low.
