Gold finally managed to break past $1800 after a gap of 8 years and 8 months mainly due to increased safe haven demand in a suffocating global situation caused by the raging pandemic which is only getting worse. Geopolitical tensions remain an ongoing concern as the Trade Deal between the U.S and China remains in limbo since the U.S President decided not to go forward with the phase 2 part of the deal. Hopes of vaccine if any continues to remain bleak further adding to the woes. Still, the “denial” remains at large with riskier asset class extending their uptrend and with earnings season on door, it may help paint a better picture about the economy answering much awaited questions regarding the ongoing disparity between the reality and euphoria. Fundamentals and technicals remains strongly in favor of bulls after last week’s closing. To watch next week – Earnings season and other important economic data.
On the chart –
Gold extended its uptrend above $1800 after a gap of nearly 9 years hitting fresh 52 week highs for closing as well though it failed to have a close above $1800. The psychological number “$1800” was taken out as the metal rose well above but likely a tide of profit booking held it back below during the end of the week. Still gold remains overly bullish with the weekly candle indicating that it has taken out the historical resistance area and is ready to move higher towards the all time highs and maybe higher. We have 2 scenarios-
1. Gold closed above the support, till this is held it can go to $1804. If this is crossed it can move towards $1823. And if this is taken out it can rally to $1839.
2. Bearish bets remain neglected as the support holds except scalp trades.
Bullish view – Bulls finally triumphed over $1800 after a long gap as increased fear drove safe haven demand but they failed to close above it. Still, the closing is extremely bullish as historical resistance seems to have been taken out with a certain amount of ease. Also aiding the bulls is a falling dollar which should continue its downtrend as unlimited QE could result in devaluation. All factors in play remain where they were rather the outlook grows only grimmer on account of increased cases and fatalities and dashed hopes of an early vaccine cementing the bullish case. For bulls to continue their march they need to hold the supports while aiming for new highs.
Bears failed to keep the trend in their favor making their bets unproductive unless the inverse head and shoulders pattern gets triggered.
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 $1804 for the targets of $1823 and $1839 with a stop loss placed below $1794. Longer term target $1857.
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 extended its uptrend above $1800 after a gap of nearly 9 years hitting fresh 52 week highs for closing as well though it failed to have a close above $1800. The psychological number “$1800” was taken out as the metal rose well above but likely a tide of profit booking held it back below during the end of the week. Still gold remains overly bullish with the weekly candle indicating that it has taken out the historical resistance area and is ready to move higher towards the all time highs and maybe higher. We have 2 scenarios-
1. Gold closed above the support, till this is held it can go to $1804. If this is crossed it can move towards $1823. And if this is taken out it can rally to $1839.
2. Bearish bets remain neglected as the support holds except scalp trades.
Bullish view – Bulls finally triumphed over $1800 after a long gap as increased fear drove safe haven demand but they failed to close above it. Still, the closing is extremely bullish as historical resistance seems to have been taken out with a certain amount of ease. Also aiding the bulls is a falling dollar which should continue its downtrend as unlimited QE could result in devaluation. All factors in play remain where they were rather the outlook grows only grimmer on account of increased cases and fatalities and dashed hopes of an early vaccine cementing the bullish case. For bulls to continue their march they need to hold the supports while aiming for new highs.
Bears failed to keep the trend in their favor making their bets unproductive unless the inverse head and shoulders pattern gets triggered.
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 $1804 for the targets of $1823 and $1839 with a stop loss placed below $1794. Longer term target $1857.
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.
Trade active