Gold created a large green bar after days of consolidation as the dollar resumed its downtrend. The rise in the price was quite sharp once $1800 was taken out and this was more of a technical burst than fundamentally as the situation across the globe continues to remain grim with new virus strain causing a fresh stir of panic as it has started spreading. The pandemic has heavily impacted the economic growth and it could remain a constant irritant for maybe another year or more as most parts of the world have only faced the second wave and historically such events do not end without a third wave. With economic growth/revival still under a dark cloud it remains quite obvious that the yellow metal should continue to shine given its safe haven characteristics. To watch next week – Fed Speakers, earnings and other important economic data.
On the chart –
Gold finally broke above the psychological level of $1800 with a large weekly green candle which to some extent is showing the start of the long awaited uptrend as it has likely broken the flag/consolidation though it remains to be reconfirmed to fully judge the technical shift. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1839. If this is crossed it can move towards $1857. And if this is taken out it can rally to $1875.
2. Bears likely have lost their last hope due to a possible bullish breakout except scalp trades.
Bullish view – Bulls stormed above $1800 as the dollar resumed its retreat along with a deepening pandemic as the fresh mutant scare further stretches the uncertainty. The bulls not only exploded above $1800 but likely broke the ongoing flag/consolidation which should push yellow metal into another league with a new all time high eyed. If the breakout is confirmed then gold will possess unmatched technical prowess as fundamentals continue to remain highly favorable.
Bearishness continues to remain out of context.
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 $1840 for the targets of $1857 and $1875 with a stop loss placed below $1833. Longer term target $1886.
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 finally broke above the psychological level of $1800 with a large weekly green candle which to some extent is showing the start of the long awaited uptrend as it has likely broken the flag/consolidation though it remains to be reconfirmed to fully judge the technical shift. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1839. If this is crossed it can move towards $1857. And if this is taken out it can rally to $1875.
2. Bears likely have lost their last hope due to a possible bullish breakout except scalp trades.
Bullish view – Bulls stormed above $1800 as the dollar resumed its retreat along with a deepening pandemic as the fresh mutant scare further stretches the uncertainty. The bulls not only exploded above $1800 but likely broke the ongoing flag/consolidation which should push yellow metal into another league with a new all time high eyed. If the breakout is confirmed then gold will possess unmatched technical prowess as fundamentals continue to remain highly favorable.
Bearishness continues to remain out of context.
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 $1840 for the targets of $1857 and $1875 with a stop loss placed below $1833. Longer term target $1886.
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.