Gold had one of its best weeks as it gained $88 in another big ranged bar as risk-off continued with nearly every other asset class receiving a battering due to the novel coronavirus. With volatility at its peak, it did not leave out gold as well but sanity prevailed as last week’s losses were erased and metal registered new 52 week high on closing basis. As China looks at a path of recovery since no new cases are being recorded, the virus is now spreading around the globe as number of infected people increased along with an increase in deaths spurring deeper recessionary fears. Fundamentally gold looks super strong and now technicals have returned back after a week’s absence to support further bullishness. To watch next week – ECB press conference and other important economic data.
On the chart –
Gold made a strong comeback creating a bigger and better green candle after a notorious red candle clearly indicating the direction. As fundamentals around the globe keep on worsening due to the effects of the deadly coronavirus, money is making way into bonds and gold from risky asset class which should continue till a vaccine or a cure is created. Technically, gold registered a fresh closing high which should lead to sustained bullishness. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1685. If this is crossed it can move towards $1698. And if this is taken out it can rally to $1716 and next $1731.
2. Short trades remain out of the picture as the trend remains bullish except scalp trades.
Bullish view – Bulls thumped their way to victory again as they made a new 52 week high erasing last week’s loss on a fear led rally which should continue in the given circumstances. Bulls charged from the onset of the week as the low was defended trapping the shorts resulting in a short squeeze. Coronavirus remains a threat but adding to the woes is the fresh conflict between Russia and OPEC members on oil production cuts which could double down the need for longs. In the current global scenario, the target of 1800 plus remains easily achievable.
Bearish bets become non-productive again after a week’s glimmer of hope.
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 $1681 for the targets of $1685 and $1698 with a stop loss placed below $1671. Longer term target $1716.
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 a strong comeback creating a bigger and better green candle after a notorious red candle clearly indicating the direction. As fundamentals around the globe keep on worsening due to the effects of the deadly coronavirus, money is making way into bonds and gold from risky asset class which should continue till a vaccine or a cure is created. Technically, gold registered a fresh closing high which should lead to sustained bullishness. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1685. If this is crossed it can move towards $1698. And if this is taken out it can rally to $1716 and next $1731.
2. Short trades remain out of the picture as the trend remains bullish except scalp trades.
Bullish view – Bulls thumped their way to victory again as they made a new 52 week high erasing last week’s loss on a fear led rally which should continue in the given circumstances. Bulls charged from the onset of the week as the low was defended trapping the shorts resulting in a short squeeze. Coronavirus remains a threat but adding to the woes is the fresh conflict between Russia and OPEC members on oil production cuts which could double down the need for longs. In the current global scenario, the target of 1800 plus remains easily achievable.
Bearish bets become non-productive again after a week’s glimmer of hope.
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 $1681 for the targets of $1685 and $1698 with a stop loss placed below $1671. Longer term target $1716.
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.
Trade active
Comment:
First long target met at $1685
Comment:
Second long target met at $1698