Gold had a week of consolidation post the rally of $120 from the lows as the price awaits further cues from the upcoming Fed meeting in the week. Also, crossing $1800 (psychological level) in one go in itself is a tough ask unless its fueled by an impactful fundamental event/news. Riskier assets on the whole were in a consolidation given the continuous flow of positive and negative news which kept it directionless and mainly the Fed meet is eyed for further movement as it should offer more insights on the inflationary perspective which yet remains a cause of worry as the pandemic continues to sweep the globe with new mutants posing a significant danger since the current vaccines are not much effective against them. The actual state of the world economy still is a mystery as the data and the ground reality continues to remain poles apart which only adds to uncertainty and this definitely is a positive for the yellow metal. To watch next week – Earnings, Fed meet and other important economic data.
On the chart –
Gold had a subdued week cradled between the support and the resistance as it awaits the important event of Fed’s interest rate decision for further direction though the trend remains largely bullish with breakouts getting respected and the move towards the top of the flag/channel on course. $1800 looks like the immediate hurdle and once its crossed then the move forward could gain even more momentum. We 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. Bears continue to find themselves outcast-ed given the current bullishness except scalp trades.
Bullish view – Bulls made a run towards $1800 but failed to even touch it as it remains a whole figure resistance which does not get conquered in one go generally. Still, the move back from the week’s low suggests the buying is coming at every dip which is absolutely in line given the bullish technicals along with highly supportive fundamentals as in the heightened uncertainty caused by the ongoing pandemic and its negative impact on the economic recovery and stability. The stage remains set for the bulls to reach the top of the flag/channel and ultimately break it on the upside which if happens would lead to fresh all time highs.
Bearishness still remains off the table.
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 $1784 for the targets of $1789 and $1804 with a stop loss placed below $1775. 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 had a subdued week cradled between the support and the resistance as it awaits the important event of Fed’s interest rate decision for further direction though the trend remains largely bullish with breakouts getting respected and the move towards the top of the flag/channel on course. $1800 looks like the immediate hurdle and once its crossed then the move forward could gain even more momentum. We 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. Bears continue to find themselves outcast-ed given the current bullishness except scalp trades.
Bullish view – Bulls made a run towards $1800 but failed to even touch it as it remains a whole figure resistance which does not get conquered in one go generally. Still, the move back from the week’s low suggests the buying is coming at every dip which is absolutely in line given the bullish technicals along with highly supportive fundamentals as in the heightened uncertainty caused by the ongoing pandemic and its negative impact on the economic recovery and stability. The stage remains set for the bulls to reach the top of the flag/channel and ultimately break it on the upside which if happens would lead to fresh all time highs.
Bearishness still remains off the table.
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 $1784 for the targets of $1789 and $1804 with a stop loss placed below $1775. 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.