Gold finally had a good move on the upside with gains more than $30 for the week as technicals continue to bloom along with a falling dollar and increased uncertainty due to the ongoing pandemic which is ceaselessly throwing up fresh challenges. The coronavirus mutations are simply messing up the vaccination drives as they seem to dodge through generating paramount fears of a prolonged economic disruption as most likely way to keep the virus from spreading currently boils down to lockdown(s) since people are still failing to understand the gravity of the situation though it might be pretty harsh to blame them only as rising inflation requires even more deeper pockets. On inflationary front, the bonds which had spiked up have come back lower as predicted by the central bodies though it still remains a cause of worry given the rising cost of goods. As global situation continues to remain gloomy it paints a perfect picture for the yellow metal to shine. To watch next week – Earnings, ECB meet and other important economic data.
On the chart –
Gold made a comforting green bar post retesting the breakout which suggests further continuity of the trend towards the flag/channel top which could be finally broken this time as the global outlook remains grim due to the surge in covid cases worldwide. We have have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1789. If this is crossed it can move towards $1804. And if this is taken out it can rally to $1823.
2. Short bets continue to remain offbeat under such heavy bullishness except scalp trades.
Bullish view – Bulls continue to ride higher as they created another high higher and closed above the resistance of the consolidation pattern which was broken in the week as fundamentals continue to worsen with covid cases surging along with increased death rates as the coronavirus continues to dodge containment through new mutations which are far more deadly and fast spreading. Technical push is probably at its highest in recent weeks with bullish pattern breakouts suggesting the yellow metal should test the flag/channel top and eventually break it on the upside which will make the metal bullish as never before with new high on the cards.
Bearishness continues to remain out of context.
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 $1782 for the targets of $1789 and $1804 with a stop loss placed below $1772. Longer term target $1823.
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 comforting green bar post retesting the breakout which suggests further continuity of the trend towards the flag/channel top which could be finally broken this time as the global outlook remains grim due to the surge in covid cases worldwide. We have have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1789. If this is crossed it can move towards $1804. And if this is taken out it can rally to $1823.
2. Short bets continue to remain offbeat under such heavy bullishness except scalp trades.
Bullish view – Bulls continue to ride higher as they created another high higher and closed above the resistance of the consolidation pattern which was broken in the week as fundamentals continue to worsen with covid cases surging along with increased death rates as the coronavirus continues to dodge containment through new mutations which are far more deadly and fast spreading. Technical push is probably at its highest in recent weeks with bullish pattern breakouts suggesting the yellow metal should test the flag/channel top and eventually break it on the upside which will make the metal bullish as never before with new high on the cards.
Bearishness continues to remain out of context.
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 $1782 for the targets of $1789 and $1804 with a stop loss placed below $1772. Longer term target $1823.
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 $1789