Gold continued its upward momentum as it made another conclusive green candle majorly on back of technicals aided by a rise in uncertainty due to the pandemic’s wrath as it forced more countries to take stricter measures to curb the spread. The pandemic has been the talking point for more than a year and is still going strong in-spite of various vaccination drives as it continues to wreck havoc by destabilizing the economic activities as more and more countries are vouching for lockdown(s) to prevent the 2nd wave from reaching the peak but historically such pandemics have 3 or more waves before they get normalized/neutralized. In such a condition where the uncertainty is a cause of immense worry be it the virus or the inflation fears gold remains the best and the safest asset class due to its characteristics. To watch next week – Powell and Yellen testimony, BIS summit and other important economic data.
On the chart –
Gold made another green candle closing above $1740 mainly on technical grounds as dollar and yields remained elevated. The forward movement confirms the trajectory of the price which should hit the channel/flag top if not finally breaking through it. Gold has been flagging since past many weeks and given the current global situation it might finally break the flag pattern on the upside. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1755. If this is crossed it can move towards $1771. And if this is taken out it can rally to $1789.
2. Bearish bets still don’t find any value except scalp trades given the ongoing trend.
Bullish view – Bulls had another decent outing as they continue to move towards the flag/channel top. The up-move was mainly credited to the technicals but dire fundamentals also aided as the pandemic refuses to die down rather the 2nd wave sweeping the globe seems stronger than the first as the mass vaccinations are also not helping much forcing countries to revisit lockdown(s) and other strict measures which would definitely dampen the economic recovery/growth if not pausing it. The momentum sides with the bulls and for the price action to remain in the uptrend bulls need to defend the supports and the mainly the low created.
Bearishness continues to remain out of context.
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 $1746 for the targets of $1755 and $1771 with a stop loss placed below $1735. Longer term target $1789.
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 made another green candle closing above $1740 mainly on technical grounds as dollar and yields remained elevated. The forward movement confirms the trajectory of the price which should hit the channel/flag top if not finally breaking through it. Gold has been flagging since past many weeks and given the current global situation it might finally break the flag pattern on the upside. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1755. If this is crossed it can move towards $1771. And if this is taken out it can rally to $1789.
2. Bearish bets still don’t find any value except scalp trades given the ongoing trend.
Bullish view – Bulls had another decent outing as they continue to move towards the flag/channel top. The up-move was mainly credited to the technicals but dire fundamentals also aided as the pandemic refuses to die down rather the 2nd wave sweeping the globe seems stronger than the first as the mass vaccinations are also not helping much forcing countries to revisit lockdown(s) and other strict measures which would definitely dampen the economic recovery/growth if not pausing it. The momentum sides with the bulls and for the price action to remain in the uptrend bulls need to defend the supports and the mainly the low created.
Bearishness continues to remain out of context.
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 $1746 for the targets of $1755 and $1771 with a stop loss placed below $1735. Longer term target $1789.
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.