Gold remained in consolidation as it moved between support and resistance posting a negative return of nearly $6. The week was a dull one in terms of fundamental news with movement of yellow metal based majorly on the fluctuations in dollar index which remained low throughout the week excepting the last day rally which pushed down gold for a lower close. With proposed phase 1 trade deal becoming a cause for larger instability with a change in tone everyday, its hardly providing the impact it used to on financial instruments allowing technicals to unfold in orderly manner. As holiday season approaches volatility tends to shrink which may push the case further for more on time correction rather than price one with bias remaining in bulls favor till the supports are held. To watch this week – Important economic data and trade deal developments.
On the chart –
Gold continued to consolidate in a set range since it remained directionless as fast approaching holiday season seems to have sucked the volatility out. With mixed signals coming from fundamentals and a sideways to bullish biased technical its really hard for gold to make a decisive move. The red diagonal trendline support remains strong which suggests continued bullishness. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1480. If this is crossed it can move towards $1495. And if this is taken out it can rally to $1510.
2. Gold looks to have made a bottom which if breaks could lead to $1434 and $1420.
Bullish view – Bulls pulled up the prices from the lows to make a higher high but failed to hang onto the gains but they defended the support quite strongly keeping the trend intact. With basically only technicals in their favor, bulls need to defend supports to keep themselves alive in holiday thinned/low volume environment.
Bearish view – Bears appeared strong as they didnt allow a positive closing for the week and even successfully pushed back the prices from highs but failed to break the support again raising questions regarding their vigor yet again. For bears to get hold of the trend they need to break the crucial supports as well as aim for newer lows.
On larger terms, Gold has turned sideways and prices are expected to be rangebound until a direction is confirmed.
Possible trades are on both sides but mainly on upside, gold can be bought above $1465 for the targets of $1480 and $1495 with a stop loss placed below $1456. Longer term target $1510.
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 until the direction is decided.
On the chart –
Gold continued to consolidate in a set range since it remained directionless as fast approaching holiday season seems to have sucked the volatility out. With mixed signals coming from fundamentals and a sideways to bullish biased technical its really hard for gold to make a decisive move. The red diagonal trendline support remains strong which suggests continued bullishness. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1480. If this is crossed it can move towards $1495. And if this is taken out it can rally to $1510.
2. Gold looks to have made a bottom which if breaks could lead to $1434 and $1420.
Bullish view – Bulls pulled up the prices from the lows to make a higher high but failed to hang onto the gains but they defended the support quite strongly keeping the trend intact. With basically only technicals in their favor, bulls need to defend supports to keep themselves alive in holiday thinned/low volume environment.
Bearish view – Bears appeared strong as they didnt allow a positive closing for the week and even successfully pushed back the prices from highs but failed to break the support again raising questions regarding their vigor yet again. For bears to get hold of the trend they need to break the crucial supports as well as aim for newer lows.
On larger terms, Gold has turned sideways and prices are expected to be rangebound until a direction is confirmed.
Possible trades are on both sides but mainly on upside, gold can be bought above $1465 for the targets of $1480 and $1495 with a stop loss placed below $1456. Longer term target $1510.
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 until the direction is decided.