Gold finally had a green week and that too a big one with gains of more than $20 re-conquering the $1200 back after giving it up just last week. Catalyst to such a massive bar was the sizeable drop in the Dollar influenced by the Jackson Hole event where the Fed presented a dovish stance to the economic policy combined with views of the American president wanting a weaker dollar. Fundamentals played a key role in the switching of tracks of both gold and dollar moving them in opposite directions of their existing trend.
On the chart –
Gold saw a quick turnaround with prices gaining more than $20 rising well above $1200 thus creating more room for upside. Prices gliding through the resistances with so much of ease can only be due to panic and fear which was clearly present in last 14 days once on the downside then on the upside. Now the key is holding of the crucial $1200 level which would decide the fate of the gold. We have 2 scenarios –
1. Gold ended up above $1200 which is a great sign for further bullish moves. Till its held gold can breathe easy with buyers emerging even in a bear market which gold is still in technically. Once $1208 is taken out it can head higher to $1217. If this level is surpassed it can head towards the next resistance at $1228. Once this is conquered it can rally to $1243 where its bound to find huge resistance.
2. Short trades keep on fading till $1200 is held, they come alive if last week’s low is broken which will trigger fresh round of selling and should take the prices to a new low.
Bullish view – Bulls finally had their way after big gap of 10 whole weeks where they were sidelined. Prices erupted above $1200 as the dollar kept on crashing. It certainly is bullish the way it has closed above key resistances suggesting that more greenery is about to bloom. This kind of price action can take the gold higher to $1243 where lies the ultimate acid test.
Bearishness is for the moment contained as price action denotes the opposite trend.
On larger terms, Gold has turned cautiously bullish and prices are expected to move higher.
Possible trades are on both sides, gold can be bought above $1208 for the targets of $1217 and $1228 with a stop loss placed below $1198. Longer term target $1243.
Short trades are against the trend and not a good choice, it comes into play once last week’s low is broken.
On the chart –
Gold saw a quick turnaround with prices gaining more than $20 rising well above $1200 thus creating more room for upside. Prices gliding through the resistances with so much of ease can only be due to panic and fear which was clearly present in last 14 days once on the downside then on the upside. Now the key is holding of the crucial $1200 level which would decide the fate of the gold. We have 2 scenarios –
1. Gold ended up above $1200 which is a great sign for further bullish moves. Till its held gold can breathe easy with buyers emerging even in a bear market which gold is still in technically. Once $1208 is taken out it can head higher to $1217. If this level is surpassed it can head towards the next resistance at $1228. Once this is conquered it can rally to $1243 where its bound to find huge resistance.
2. Short trades keep on fading till $1200 is held, they come alive if last week’s low is broken which will trigger fresh round of selling and should take the prices to a new low.
Bullish view – Bulls finally had their way after big gap of 10 whole weeks where they were sidelined. Prices erupted above $1200 as the dollar kept on crashing. It certainly is bullish the way it has closed above key resistances suggesting that more greenery is about to bloom. This kind of price action can take the gold higher to $1243 where lies the ultimate acid test.
Bearishness is for the moment contained as price action denotes the opposite trend.
On larger terms, Gold has turned cautiously bullish and prices are expected to move higher.
Possible trades are on both sides, gold can be bought above $1208 for the targets of $1217 and $1228 with a stop loss placed below $1198. Longer term target $1243.
Short trades are against the trend and not a good choice, it comes into play once last week’s low is broken.
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