Gold closed in the green as the technicals continued to propel the price along with a lower dollar. The price was dominated by the inflation fears in the start of the week but it eased away as the economic data suggested a robust recovery which was the reason behind the dip in the dollar and the bonds. The ongoing pandemic continues to ravage the economy as it has forced many countries to shutdown again to battle its deadly second wave which is claiming more lives nearly every day but the economic data speaks completely opposite which is just adding to the uncertainty. Some countries are reopening after vaccinating its population but with the new mutant jumping borders it might create undesired situations again which only adds up to the bullish scenario for the yellow metal. It may look only pessimistic around but the reality is such with uncertainty just going one way up as if not the pandemic the other geopolitical reasons continue to haunt the world without taking a breather which bodes well for the gold as it remains the safest haven. To watch next week – Fed Minutes and other important economic data.
On the chart –
Gold had a mild green bar but a positive one post an important candle which was showcasing the awaited breakout, the bar created is still a tricky one as it cannot be taken as a foolproof to ascertain the accuracy of the breakout but the bounce from the lows does suggest otherwise as in the retest of the flag/consolidation which confirms the breakout. Given the flag/consolidation is finally broken with a confirmation it makes the path of gold very clear. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1857. If this is crossed it can move towards $1875. And if this is taken out it can rally to $1886.
2. Bears remain ousted post the bullish breakout except scalp trades.
Bullish view – Bulls tried to advance higher post the likely flag/consolidation breakout but were grounded briefly as inflation fears overtook though they still managed to end the week with minor gains making a new closing high. The situation only worsened with geopolitical tensions reemerging along with increased fears due to fast spreading of a new variant of the coronavirus which might be able to dodge the vaccine as well. The fundamentals stay deeply in favor of higher prices while technicals have turned ultra bullish post the likely breakout.
Bearishness continues to remain off the table post another bullish breakout.
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 $1846 for the targets of $1857 and $1875 with a stop loss placed below $1837. 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 had a mild green bar but a positive one post an important candle which was showcasing the awaited breakout, the bar created is still a tricky one as it cannot be taken as a foolproof to ascertain the accuracy of the breakout but the bounce from the lows does suggest otherwise as in the retest of the flag/consolidation which confirms the breakout. Given the flag/consolidation is finally broken with a confirmation it makes the path of gold very clear. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1857. If this is crossed it can move towards $1875. And if this is taken out it can rally to $1886.
2. Bears remain ousted post the bullish breakout except scalp trades.
Bullish view – Bulls tried to advance higher post the likely flag/consolidation breakout but were grounded briefly as inflation fears overtook though they still managed to end the week with minor gains making a new closing high. The situation only worsened with geopolitical tensions reemerging along with increased fears due to fast spreading of a new variant of the coronavirus which might be able to dodge the vaccine as well. The fundamentals stay deeply in favor of higher prices while technicals have turned ultra bullish post the likely breakout.
Bearishness continues to remain off the table post another bullish breakout.
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 $1846 for the targets of $1857 and $1875 with a stop loss placed below $1837. 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.
Trade active
Comment:
First long target met at $1857
Comment:
Second long target met at $1875
Comment:
Third long target met at $1886