Gold replicated last week’s candle with just a difference in direction and a notable higher low on weekly timeframe, thus still remaining in consolidation/range bound. With the U.S presidential elections now mere 15 days away and a massive surge in new virus cases forcing most of the European countries into partial lockdown again, uncertainty is really spiking up now which should definitely bode well for the yellow metal. Movements in the asset classes are likely depicting a setup/speculative positioning as none are showing any sort of linear/paired move which usually happens when the markets are relatively calmer and it would be real harsh to blame any asset class for other’s direction in the given scenario. While on technical front gold remains safely pouched in bullish grip with breakouts remaining intact. To watch next week – Stimulus talks, earnings and other important economic data.
On the chart –
Gold mirrored last week’s move but on the downside ending just shy of $1900. A close below $1900 might raise eyebrows again but as mentioned earlier gold had likely found its actual demand zone near $1850s which was its recent low and that this crucial support area ($1920s) might now be not that very superlative. As breakouts remain in play along with 20 day moving average being respected in every fall it clearly indicates the trend which is bullish. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1901. If this is crossed it can move towards $1921. And if this is taken out it can rally to $1945.
2. Short trades still remain outcast as supports are held.
Bullish view – Bulls failed to hold onto $1900 ending the week just shy of it as the dollar had a green week though this relation might not hold any meaning as markets are busy positioning themselves for the next big event which should cause extreme volatility. This close should not be treated as a gloomy picture at all as the deeper supports/demand zone continues to hold along with pattern breakouts remaining intact. While technically gold remains bullish, fundamentals aiding higher prices continue to pour in as uncertainty and chaos engulfs the world again with virus cases hitting the highest daily count forcing many countries to reimpose strict restrictions which should dent the already slow economic recovery.
Bearishness remains off the table in such uncertain environment.
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 $1914 for the targets of $1921 and $1945 with a stop loss placed below $1905. Longer term target $1963.
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 mirrored last week’s move but on the downside ending just shy of $1900. A close below $1900 might raise eyebrows again but as mentioned earlier gold had likely found its actual demand zone near $1850s which was its recent low and that this crucial support area ($1920s) might now be not that very superlative. As breakouts remain in play along with 20 day moving average being respected in every fall it clearly indicates the trend which is bullish. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1901. If this is crossed it can move towards $1921. And if this is taken out it can rally to $1945.
2. Short trades still remain outcast as supports are held.
Bullish view – Bulls failed to hold onto $1900 ending the week just shy of it as the dollar had a green week though this relation might not hold any meaning as markets are busy positioning themselves for the next big event which should cause extreme volatility. This close should not be treated as a gloomy picture at all as the deeper supports/demand zone continues to hold along with pattern breakouts remaining intact. While technically gold remains bullish, fundamentals aiding higher prices continue to pour in as uncertainty and chaos engulfs the world again with virus cases hitting the highest daily count forcing many countries to reimpose strict restrictions which should dent the already slow economic recovery.
Bearishness remains off the table in such uncertain environment.
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 $1914 for the targets of $1921 and $1945 with a stop loss placed below $1905. Longer term target $1963.
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 $1921