Gold moved higher finally making a new closing high in weekly timeframe amidst the ongoing chaos worldwide. Situations globally are refusing to die down rather fresh concerns keep popping up adding to the already long list of woes. Fresh surge in new cases along with few countries facing 2nd wave of infections have again stoked growth fears as the worst affected are reconsidering lockdowns again. Economic data continues to signal unabated pain in the system while a lower dollar suggests faith in a quick turnaround is waning pretty fast. Without any vaccine in sight, fundamentals look really scary throwing light on “the end of the world” prophecies. Technically gold is in a sweet spot after closing at new highs. To watch next week – Important economic data.
On the chart –
Gold continued its uptrend managing a new closing high as well as bouncing back from lows/supports suggesting the overall trend. Fundamentals continue to provide increased support to the prices as none of the tensions/issues looks to be resolved anytime soon while technicals strongly present a fresh move on the upside post last week’s closing. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1755. If this is crossed it can move towards $1771. And if this is taken out it can rally to $1789.
2. Short trades remain a failing bet as gold dwells strongly in bullish grip except scalp trades.
Bullish view – Bulls finally made a new closing high (weekly) as they continued to advance on a lower dollar and worsening economic outlook. The rebound from the lows indicate “buy on dips” probably remains the best trade out there until a major support gets breached. Fundamentals are firmly in favor of higher prices, while technicals look even more bullish after a new closing high, all in all $1800 plus looks a near reality.
Bearish bets remain wrecked as new closing high makes it super bullish. Possible trades are on both sides but mainly on upside, gold can be bought above $1745 for the targets of $1755 and $1771 with a stop loss placed below $1733. Longer term target $1789. 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.