Gold soared nearly $50 in the last week posting 52 week high gains in a given week before settling for gains above $30. Such a move was anticipated given the technical pattern of double bottom which was formed at $1307. Higher than expected Inflation data of America fueled the yellow metal’s gains which moved nearly vertically after a knee jerk reaction of a minor fall due to the rise in Dollar Index. Gold was, is, and will always remain a hedge for inflation and its move was clearly related to the data on fundamental grounds. This weekly move suggests gold remains in a strong bull trend.
On the chart –
Gold prices surged to highs of $1360s which was earlier created in this year facing a resistance for the week there after bouncing off the 10 day moving average. Gold held on the key support of $1308 and moved higher suggesting a bottom formation is in play at $1300. We have 2 scenarios –
1. Gold flew higher to the highs of $1360s where it faced resistance and declined towards its support. If this support is held then gold can move back higher to $1358. If this is crossed it can head towards $1374. If this 52 week high is conquered it can move north to new 52 week high at $1386.
2. There are no short trades unless the support is breached and if broken the downside is limited to $1331.
Bullish view – Bulls emerged a clear winner as they posted 52 week high weekly gains after 2 weeks of negative return which may be considered as consolidation. As $1308 was held bulls got the ammunition to push the prices higher and this time they pushed it very high climbing multiple resistances at one go before stopping at the earlier highs at $1360s. Both technically and fundamentally the data supported this bullish move. If this trend remains then $1400 is on the horizon sooner than thought off.
There are no bearish views as the support was held.
On larger terms, Gold continues to be in a strong bullish grip and prices are expected to be sideways to higher.
Possible trades are on both sides but largely on long side, gold can be bought above $1356 for the targets of $1358 and $1374 with a stop loss placed below $1345. Longer term target $1386.
There are no short trades unless $1345 breaks, and if it does still its limited to $1331.
On the chart –
Gold prices surged to highs of $1360s which was earlier created in this year facing a resistance for the week there after bouncing off the 10 day moving average. Gold held on the key support of $1308 and moved higher suggesting a bottom formation is in play at $1300. We have 2 scenarios –
1. Gold flew higher to the highs of $1360s where it faced resistance and declined towards its support. If this support is held then gold can move back higher to $1358. If this is crossed it can head towards $1374. If this 52 week high is conquered it can move north to new 52 week high at $1386.
2. There are no short trades unless the support is breached and if broken the downside is limited to $1331.
Bullish view – Bulls emerged a clear winner as they posted 52 week high weekly gains after 2 weeks of negative return which may be considered as consolidation. As $1308 was held bulls got the ammunition to push the prices higher and this time they pushed it very high climbing multiple resistances at one go before stopping at the earlier highs at $1360s. Both technically and fundamentally the data supported this bullish move. If this trend remains then $1400 is on the horizon sooner than thought off.
There are no bearish views as the support was held.
On larger terms, Gold continues to be in a strong bullish grip and prices are expected to be sideways to higher.
Possible trades are on both sides but largely on long side, gold can be bought above $1356 for the targets of $1358 and $1374 with a stop loss placed below $1345. Longer term target $1386.
There are no short trades unless $1345 breaks, and if it does still its limited to $1331.
Comment:
Trade Active
Comment:
Short scalp achieved from $1345 to $1331
Trade closed: target reached