Gold yet again fell prey to consolidation/correction after making highs of $1535 adhering to the ongoing reversal pattern but it also again took support of the diagonal black trendline and bounced back from the lows (making a similar 5th bottom) clearly indicating massive buying at that level. Once again a big negative surprise popped out of the “Pandora’s Box” in form of a formal Impeachment inquiry/process of the U.S President which definitely should add another feather to the bullish trend as it could become the major driving factor for the gold ahead topping all the geopolitical tensions and economic worries. The growth situation of an imminent recession and slowdown remains elevated due to poor data coming from nearly every part of globe further strengthening the case for higher gold prices. To watch next week – Fed chair Powell’s speech and other important data.
On the chart –
Gold had a cut of $20 falling back below $1500 again broadly on account of a higher dollar, mixed news flow and a technical correction. Though it was a red week but it did test the tenacity of the low which again passed encouraging continued bullishness. We have 2 scenarios –
1. Gold closed above the support, till its held it can move to $1510. If this is crossed it can rally till $1527. And if this is taken out it can go higher till $1541.
2. Short trades becomes active once the reversal pattern gets confirmed and gold breaks down for the targets of $1464 and $1448.
Bullish view – Bulls failed to capitalize on the gains as the price dipped significantly but all is not lost as key support of the diagonal trendline was held plus the price bounced back from the lows making it a 5th bottom which generally suggests a strong trend reversal. Fundamentals remain in favor of bulls as tensions cease to end but for bulls to remain in the driving seat they need to defend the supports to keep the trend intact and till its held a march towards $1800 remains a close sight.
Bearish view – Bears once again pushed the price back below $1500 but failed to break through the crucial supports nor were able to break the reversal pattern which could have triggered a selloff causing a change in trend. For bears to take the lead they need to break through the key supports.
On larger terms, Gold continues to remain bullish and prices are expected to head higher.
Possible trades are on both sides but mainly on upside, gold can be bought above $1501 for the targets of $1510 and $1527 with a stop loss placed below $1486. Longer term target $1541.
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 reversal gets confirmed for positional trades.
NOTE – There is a probable breakout in monthly timeframe which will be confirmed when the bar closes on 30th.
On the chart –
Gold had a cut of $20 falling back below $1500 again broadly on account of a higher dollar, mixed news flow and a technical correction. Though it was a red week but it did test the tenacity of the low which again passed encouraging continued bullishness. We have 2 scenarios –
1. Gold closed above the support, till its held it can move to $1510. If this is crossed it can rally till $1527. And if this is taken out it can go higher till $1541.
2. Short trades becomes active once the reversal pattern gets confirmed and gold breaks down for the targets of $1464 and $1448.
Bullish view – Bulls failed to capitalize on the gains as the price dipped significantly but all is not lost as key support of the diagonal trendline was held plus the price bounced back from the lows making it a 5th bottom which generally suggests a strong trend reversal. Fundamentals remain in favor of bulls as tensions cease to end but for bulls to remain in the driving seat they need to defend the supports to keep the trend intact and till its held a march towards $1800 remains a close sight.
Bearish view – Bears once again pushed the price back below $1500 but failed to break through the crucial supports nor were able to break the reversal pattern which could have triggered a selloff causing a change in trend. For bears to take the lead they need to break through the key supports.
On larger terms, Gold continues to remain bullish and prices are expected to head higher.
Possible trades are on both sides but mainly on upside, gold can be bought above $1501 for the targets of $1510 and $1527 with a stop loss placed below $1486. Longer term target $1541.
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 reversal gets confirmed for positional trades.
NOTE – There is a probable breakout in monthly timeframe which will be confirmed when the bar closes on 30th.
Comment:
The reversal pattern of Head and Shoulder is active as gold broke the neckline.
Trade active
Comment:
Market has turned "sell on rise"
Comment:
First target met at $1464