Gold printed another green candle on back of dollar weakness ending the week not only above $1900 but above the crucial level of $1920s which tends to be the gatekeeper for the further price movement. As ever so important event of U.S election draws closer volatility will continue to ramp up irrespective of the nature of news flow rather even small things will be looked through magnifying glass just for the sake of speculation which definitely suggests that gold will remain in an uptrend due to its safe haven status. The ongoing fundamental issues like geopolitical tensions and round two of the pandemic continues to keep the world enveloped in uncertainty while on the vaccine front October is a critical month as most of the trial results are due this month. Net net all factors remain supportive of the bullishness. To watch next week – Earnings, Fedspeak, Brexit talks and other important economic data.
On the chart –
Gold closed above the important $1920s level broadly on account of a falling dollar clearly suggesting the ongoing trend as all dips towards supports are being bought. The bounce from the 20 day moving average defines a short term low and likely cracks open the deeper demand zone. Again last week gold broke out from the triangle/wedge which poses as a sufficient cause of bullishness apart from the ongoing concerns and the broader chart which is extremely bullish unless it turns otherwise which is a low probability. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1945. If this is crossed it can move towards $1963. And if this is taken out it can rally to $1989.
2. Bearish bets remains isolated as gold closed above the support except scalp trades.
Bullish view – Bulls came roaring back as gold closed above the important level of $1920 as dollar remained in downtrend. Not only did the bulls manage to close above the crucial support but also made another breakout from triangle/wedge on daily timeframe showcasing their prowess. Factors/fundamentals promoting bullishness remains intact rather it just adds on every week like the surge in virus cases across the globe and the ongoing Asian drama. Technicals remain largely supportive of higher prices due to pattern breakouts and supports being respected. Till November 03 event all asset classes will likely remain volatile with gold benefiting the most out of this scenario.
Bears remain exiled as the gold closed above the support.
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 $1936 for the targets of $1945 and $1963 with a stop loss placed below $1925. Longer term target $1989.
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 closed above the important $1920s level broadly on account of a falling dollar clearly suggesting the ongoing trend as all dips towards supports are being bought. The bounce from the 20 day moving average defines a short term low and likely cracks open the deeper demand zone. Again last week gold broke out from the triangle/wedge which poses as a sufficient cause of bullishness apart from the ongoing concerns and the broader chart which is extremely bullish unless it turns otherwise which is a low probability. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1945. If this is crossed it can move towards $1963. And if this is taken out it can rally to $1989.
2. Bearish bets remains isolated as gold closed above the support except scalp trades.
Bullish view – Bulls came roaring back as gold closed above the important level of $1920 as dollar remained in downtrend. Not only did the bulls manage to close above the crucial support but also made another breakout from triangle/wedge on daily timeframe showcasing their prowess. Factors/fundamentals promoting bullishness remains intact rather it just adds on every week like the surge in virus cases across the globe and the ongoing Asian drama. Technicals remain largely supportive of higher prices due to pattern breakouts and supports being respected. Till November 03 event all asset classes will likely remain volatile with gold benefiting the most out of this scenario.
Bears remain exiled as the gold closed above the support.
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 $1936 for the targets of $1945 and $1963 with a stop loss placed below $1925. Longer term target $1989.
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.