On the chart –
Gold kept piling on the negative returns amidst key fundamental event of trade war getting highlighted everyday which must have pushed the prices higher but it also failed to make any substantial positive impact on gold . Even the falling dollar index could not help the metal gain momentum on the upside but it helped cap the downside which may seem to stall if the dollar index remains weak. Its still gloomy for the bulls as its becoming a sell on rise kind of market. We have 2 scenarios –
1. Gold has an outside chance for an upmove but again it seems limited and possibly could be sold into as nothing has changed in the last week.
2. Gold’s downward journey is intact and a test of the support at the is very likely. Gold failed to rise above the support of $1276, this can follow a retest of $1260. If this is broken it can slide till $1243.
There is no view for the moment as technically gold is in a downtrend.
view – Bears kept the metal under pressure as they created a fresh low for the year on closing basis. Lower lows formation indicate the strength on the downside and its the better course to sight upon as there seems to be no buyers of gold even at lower levels. With such kind of price action its highly likely the next support will be tested in coming days.
On larger terms, gold remains with the prices expected to head south.
Possible trades are on both sides, gold can be sold below $1276 for the targets of $1260 and $1243 with a stop loss placed above $1284.
There are no long trades until the price moves back into the channel though bounces can be seen as long opportunities.