Gold finally had a conclusive week with gains of $16 breaking the 4-week consolidation broadly on account of a lower dollar. With the year coming to a close and mostly all important events done and dusted for the month, holiday mood should keep the volumes light and volatility low in remaining days of the year. Fundamentals still remain mixed whilst technical support for bulls continues. To watch this week – Important economic data.
On the chart –
Gold made a move out of its consolidation as it closed higher on weekly time frame. Prices remained buoyed on account of a lower dollar as the 2 important events passed by which were quite negative for gold but couldn’t create an impact due to continuous weakening of dollar which augurs well for bulls again apart from technical support of red diagonal trendline which was respected once again. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1480. If this is crossed it can move towards $1495. And if this is taken out it can rally to $1510.
2. Bearishness remains paper thin as gold yet again held onto the support excepting scalp trades, if the support breaks it can move to $1448 and $1434.
Bullish view – Bulls made a mark for themselves after a gap of 4 weeks as they broke through the consolidation. The weakened dollar was the key aid to the bulls this time around as they weathered 2 important events whose outcome was negative for the prices. Technicals remain in favor of bulls, but they need to defend the supports to keep going higher.
Bearish view – Bears were fully drained out as a lower dollar helped the bulls largely allowing the metal to break out of consolidation. For bears to regain momentum they need to break crucial supports.
On larger terms, Gold has turned bullish and prices are expected to head higher.
Possible trades are on both sides but mainly on upside, gold can be bought above $1480 for the targets of $1495 and $1510 with a stop loss placed below $1468. Longer term target $1527.
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 move out of its consolidation as it closed higher on weekly time frame. Prices remained buoyed on account of a lower dollar as the 2 important events passed by which were quite negative for gold but couldn’t create an impact due to continuous weakening of dollar which augurs well for bulls again apart from technical support of red diagonal trendline which was respected once again. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1480. If this is crossed it can move towards $1495. And if this is taken out it can rally to $1510.
2. Bearishness remains paper thin as gold yet again held onto the support excepting scalp trades, if the support breaks it can move to $1448 and $1434.
Bullish view – Bulls made a mark for themselves after a gap of 4 weeks as they broke through the consolidation. The weakened dollar was the key aid to the bulls this time around as they weathered 2 important events whose outcome was negative for the prices. Technicals remain in favor of bulls, but they need to defend the supports to keep going higher.
Bearish view – Bears were fully drained out as a lower dollar helped the bulls largely allowing the metal to break out of consolidation. For bears to regain momentum they need to break crucial supports.
On larger terms, Gold has turned bullish and prices are expected to head higher.
Possible trades are on both sides but mainly on upside, gold can be bought above $1480 for the targets of $1495 and $1510 with a stop loss placed below $1468. Longer term target $1527.
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.