Gold staged a decent recovery after touching the channel/flag low as the dollar remained in declining trend. The metal was dangerously positioned at the start of the week as a move below the support (channel/flag) would have resulted in a breakdown which in current scenario was not the apt case to happen given the uncertainties world is facing due to the pandemic and other geopolitical tensions. Thus the brisk move back above $1800 after having 3 horrid weeks doesn’t really raise any eyebrows nor was it on any unexpected lines as the price is moving in a range/band/channel since the start of August. Only one news which could have derailed the bullish trend was the vaccine and its acceptance but it failed as well to change the trend which definitely now further cements the bullish aura of the yellow metal. The coronavirus has created a huge disparity in the world clearly making the rich richer and the poor poorer since its exposure which has resulted or rather forced many countries to think about measures to end this disparity out of which one is the “Great Reset” which if enforced could lead to unimaginable changes in the way the economies function and this itself is a biggest uncertainty generator which should keep the gold price afloat and on the uptrend. To watch next week – Stimulus talks, Brexit endgame and other important economic data.
On the chart –
Gold recovered from the lows quite smartly ending comfortably above $1800 again. The channel/flag low was tested and the price bounced back suggesting that the near $200 downtrend may be over and the momentum on the upside is getting stronger. The only hurdle for the yellow metal could be the important $1850-$1870 zone as seen earlier. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1839. If this is crossed it can move towards $1857. And if this is taken out it can rally to $1875.
2. Bears once again got trapped in the notion of a breakdown resulting in the similar situation which they are facing since many weeks excepting scalp trading.
Bullish view – Bulls came back stronger than ever once the channel/flag support got respected. This move on the upside was more of technical in nature as nothing much changed in last 15 days but nevertheless the dollar supported the move as it remained in the downtrend with the pandemic continuously raising the uncertainty levels as the fresh cases remained at record highs forcing countries to take restrictive measures again. For bulls the area of $1850-$1870 might create some trouble but if crossed it can result to another brisk move past $1900 and well this time the flag might also break on the upside which will take the metal to another level of bullishness and back on track towards $2700s.
Bearishness yet again remains out of the scene.
On larger terms, gold remains bullish and prices are expected to head higher.
Possible trades are on both sides but mainly on upside, gold can be bought above $1850 for the targets of $1875 and $1886 with a stop loss placed below $1838. Longer term target $1901.
Dips towards support (and breakout region) can be used to create longs for the above mentioned targets.
Shorts can be useful for scalp trades only.
On the chart –
Gold recovered from the lows quite smartly ending comfortably above $1800 again. The channel/flag low was tested and the price bounced back suggesting that the near $200 downtrend may be over and the momentum on the upside is getting stronger. The only hurdle for the yellow metal could be the important $1850-$1870 zone as seen earlier. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1839. If this is crossed it can move towards $1857. And if this is taken out it can rally to $1875.
2. Bears once again got trapped in the notion of a breakdown resulting in the similar situation which they are facing since many weeks excepting scalp trading.
Bullish view – Bulls came back stronger than ever once the channel/flag support got respected. This move on the upside was more of technical in nature as nothing much changed in last 15 days but nevertheless the dollar supported the move as it remained in the downtrend with the pandemic continuously raising the uncertainty levels as the fresh cases remained at record highs forcing countries to take restrictive measures again. For bulls the area of $1850-$1870 might create some trouble but if crossed it can result to another brisk move past $1900 and well this time the flag might also break on the upside which will take the metal to another level of bullishness and back on track towards $2700s.
Bearishness yet again remains out of the scene.
On larger terms, gold remains bullish and prices are expected to head higher.
Possible trades are on both sides but mainly on upside, gold can be bought above $1850 for the targets of $1875 and $1886 with a stop loss placed below $1838. Longer term target $1901.
Dips towards support (and breakout region) can be used to create longs for the above mentioned targets.
Shorts can be useful for scalp trades only.
Comment:
First target is $1857
Trade active
Comment:
First long target met at $1857
Comment:
Second long target met at $1875