Gold soared above $1600 briefly when the geopolitical tensions were at the peak but the rally fizzled out equivalently faster due to de-escalation of the fears making the metal fall to lows of $1540s before settling the week at $1562 which is again a new closing high. Mounting fears regarding a possible war between U.S and Iran was calmed since both sides displayed intentions of peace after having a military jibe at each other triggering the risk-on rally again after a brief pause which was the major contributor for the gold prices to take a back seat after initial outburst. Though the candle formed is not a healthy one for bulls as it might be taken as a reversal sign but a fresh closing high suggests continued bullishness with fresh concerns over the weekend adding to the support of the bulls. To watch this week – U.S – China trade deal signing and other important economic data.
On the chart –
Gold burst through $1600 on fears of a possible war but was unable to hold on to much of the gains as it only managed $10 closing way below $1600 which may be seen as a sign of reversal but fresh concerns over the weekend should be sufficient to negate any such scenarios. Fundamentals continue to support higher gold prices even if the technicals show a pause of any sorts due to the type of candle formed which should keep the bullish trend intact. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1571. If this is crossed it can move towards $1581. And if this is taken out it can rally to $1597.
2. Short trades remain uninteresting as the bullish trend remains intact except scalp trades.
Bullish view – Bulls conquered $1600 after more than 6 years on account of increased geopolitical tensions which had a risk of a possible war but failed to hold on to much of the gains due to de-escalation of fears making an unhealthy candle, still they managed to have a new closing high which keeps them on track for further gains. Fresh concerns over the weekend add to the fundamental support which should push the technicals along with it towards $1800 plus (long term) as situation is ripe for the upswing to continue.
Bearish bets still remain out of context.
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 $1564 for the targets of $1571 and $1581 with a stop loss placed below $1554. Longer term target $1597.
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 burst through $1600 on fears of a possible war but was unable to hold on to much of the gains as it only managed $10 closing way below $1600 which may be seen as a sign of reversal but fresh concerns over the weekend should be sufficient to negate any such scenarios. Fundamentals continue to support higher gold prices even if the technicals show a pause of any sorts due to the type of candle formed which should keep the bullish trend intact. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1571. If this is crossed it can move towards $1581. And if this is taken out it can rally to $1597.
2. Short trades remain uninteresting as the bullish trend remains intact except scalp trades.
Bullish view – Bulls conquered $1600 after more than 6 years on account of increased geopolitical tensions which had a risk of a possible war but failed to hold on to much of the gains due to de-escalation of fears making an unhealthy candle, still they managed to have a new closing high which keeps them on track for further gains. Fresh concerns over the weekend add to the fundamental support which should push the technicals along with it towards $1800 plus (long term) as situation is ripe for the upswing to continue.
Bearish bets still remain out of context.
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 $1564 for the targets of $1571 and $1581 with a stop loss placed below $1554. Longer term target $1597.
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.