The gold ( XAUUSD ) on daily terms: patterns have occurred at 1332.05 and 1347.12 levels that counter the previous formation of and on track of forming the triple top pattern as bears resume at 1356.78 levels.
These patterns have occurred after testing strong support at neckline, but this cannot be isolated as stern bulls rallies as , and curves have been indecisive and on the other hand also signals indecisiveness.
You could make out that the price has been oscillating between 1365 and 1306.40 levels since 3rd January.
Despite the DMA crossover, the prices are stuck between 7DMA and 21DMA as and doesn’t confirm momentum convincingly and has also been indecisive.
On a broader perspective, we must appreciate the strength of this precious metal price as the intermediate trend has been spiking through pattern, and especially after the strong test of support at around $1300 mark, on the flip side, bears resume exactly at resistance (refer weekly plotting).
Both leading oscillators have been indecisive even in this timeframe.
While same has been the case with trend indicators, both and EMAs are also indecisive to signal further uptrend.
Hence, long-term investors can wait and watch out closely for decisive breach below 1365-68 levels for a safe play with long hedges.
Accordingly, we recommend buying delta-hedged 3M XAUUSD 25-delta risk reversals @ 1.3/1.6 vol in order to arrest risks.
Well, on speculative basis, writing expensive calls and puts are recommended to establish short strangle strategy that are the best suitable amid prevailing lower IV condition of XAUUSD , hence, the strategy reads this way, shorting 1W (1%) OTM puts as well as 1W (1%) OTM calls for a net credit.
The strategy not only gives you the advantage of an anticipated crush but also give us some room to be wrong because we may short premium narrowing strikes while in greed of collecting more credit than when IV is low.