Gold had a negative outing after 2 weeks of upside from the lows as the rise in dollar likely prevented gains for the yellow metal. Other than the dollar connection its hard to point towards any other factor since the globe is in similar situation as it was a year ago with virus cases and fatalities on the rise in-spite of large scale scale vaccination drives opted by the countries. In simple words many countries are now grappling with the 2nd wave and some who are going through it already are fearing a deadlier 3rd wave which by all means seems to fit as historically seen such pandemics haunt around for 3 or more waves. Another unseen crisis troubled the world last week as the important trading route of Suez canal got blocked by an extra large cargo ship halting/delaying the smooth trade though it may not be of a major concern. With the major issue of the pandemic still showing no signs of cooling, the economic impact of it will only worsen further as job cuts are back on the cards so are stricter measures and lockdown(s) which could fuel the yellow metal to the highs again as the demand for safe haven is bound to increase in the given circumstances. To watch next week – Important economic data.
On the chart –
Gold had a red candle following 2 green ones as rising dollar limited the gains plus the down move can be attributed to a simple retest of the smaller channel/flag breakout as well. Technicals out-rightly sound bullish given the breakout in smaller time-frame plus the ongoing bigger channel movement on the upside/top as the bottom has been hit already. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1740. If this is crossed it can move towards $1755. And if this is taken out it can rally to $1771.
2. Bears continue to find themselves isolated as another bullish breakout thwarts the shorts except the scalp trades.
Bullish view – Bulls had another victory even in the red week as they were able to breakout of a smaller channel/flag in lower time-frames. The situation across the globe certainly pushes for the bullish case as well given the mounting uncertainty arising from the ongoing pandemic which is not willing to even take a break rather it has fueled even more fears of a deadlier 3rd wave as vaccines are not helping much against the new variants. Coming to the technicals, another bullish breakout confirms the ongoing trend which should lead the price to the top of the channel/flag if not break it finally.
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 $1737 for the targets of $1740 and $1755 with a stop loss placed below $1728. Longer term target $1771.
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 red candle following 2 green ones as rising dollar limited the gains plus the down move can be attributed to a simple retest of the smaller channel/flag breakout as well. Technicals out-rightly sound bullish given the breakout in smaller time-frame plus the ongoing bigger channel movement on the upside/top as the bottom has been hit already. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1740. If this is crossed it can move towards $1755. And if this is taken out it can rally to $1771.
2. Bears continue to find themselves isolated as another bullish breakout thwarts the shorts except the scalp trades.
Bullish view – Bulls had another victory even in the red week as they were able to breakout of a smaller channel/flag in lower time-frames. The situation across the globe certainly pushes for the bullish case as well given the mounting uncertainty arising from the ongoing pandemic which is not willing to even take a break rather it has fueled even more fears of a deadlier 3rd wave as vaccines are not helping much against the new variants. Coming to the technicals, another bullish breakout confirms the ongoing trend which should lead the price to the top of the channel/flag if not break it finally.
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 $1737 for the targets of $1740 and $1755 with a stop loss placed below $1728. Longer term target $1771.
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.