Gold mirrored past week’s candle yet again but on the downside retesting the breakout and in the process creating a double bottom which is an extremely bullish sign adding to the already bullish price action post its 5 week consolidation/pattern breakout. Politically, situation in America remains largely same with Donald Trump still refusing to concede the already lost race of the White House as he is still pursuing legal route to overturn the results which doesn’t pose good for the overall economic outlook for America as uncertainty still hangs in the air even though the result might not get changed at all. Speaking of the pandemic, its creating quite a bit of ruckus which is adding to the injury as the spread is getting quicker and fatal since hospitals are getting overwhelmed in badly affected countries and in some other ones the impact of third wave is felt as well which is a deeply concerning sign as it provides certainty of another wave in countries which are still dealing with either later stages of wave one or are amidst wave two. Though some success has been achieved on the vaccine front with Pfizer partnered along with a German company claiming to have created one with over 90% success rate (which was the only reason for the fall in gold price last week) still its not a 100% and convincing people to get vaccinated will be a tough ask plus the availability of it will take time as well with many timeframes darted towards the public as in sense of months. With winter almost on the verge of setting in, already the rise in cases are creating enough pandemonium for countries to have even stricter measures with the most effective being the total lockdown which many are still avoiding as it would lead to the economic collapse again. All these happenings point towards a sustained bull run as gold is considered the best in safe haven asset class. To watch next week – Earnings and other important economic data.
On the chart-
Gold fell back below $1900 again as positive developments on vaccine front created a stir in the metal price though what happened on the chart only strengthens the bullish trend as the strong reversal pattern of double bottom got created along with a successful retest of the breakout. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1901. If this is crossed it can move towards $1921. And if this is taken out it can rally to $1945.
2. Bears were hurried into the picture only to get stopped out as the supports held strong.
Bullish view – Bulls faced the heat of the much feared/dared news regarding a vaccine but the losses narrowed quickly with yellow metal creating a double bottom and rising back. Even the breakout of past week was also tested successfully which augurs well for the bulls in the longer run. With most of the events and major game changers out of the way and gold adhering to its supports pretty well it seems that the prolonged bull run might get underway after many rocky weeks. Fundamentals remain supportive as uncertainty remains unmatched as the pandemic continues to roil the world with its second wave and geopolitical risks remaining at highs due to change in the Presidency in America while technically gold is at its best with multiple bullish pattern breakouts.
Bearishness remains off the table post the double bottom.
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 $1901 for the targets of $1921 and $1945 with a stop loss placed below $1891. Longer term target $1963.
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 fell back below $1900 again as positive developments on vaccine front created a stir in the metal price though what happened on the chart only strengthens the bullish trend as the strong reversal pattern of double bottom got created along with a successful retest of the breakout. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1901. If this is crossed it can move towards $1921. And if this is taken out it can rally to $1945.
2. Bears were hurried into the picture only to get stopped out as the supports held strong.
Bullish view – Bulls faced the heat of the much feared/dared news regarding a vaccine but the losses narrowed quickly with yellow metal creating a double bottom and rising back. Even the breakout of past week was also tested successfully which augurs well for the bulls in the longer run. With most of the events and major game changers out of the way and gold adhering to its supports pretty well it seems that the prolonged bull run might get underway after many rocky weeks. Fundamentals remain supportive as uncertainty remains unmatched as the pandemic continues to roil the world with its second wave and geopolitical risks remaining at highs due to change in the Presidency in America while technically gold is at its best with multiple bullish pattern breakouts.
Bearishness remains off the table post the double bottom.
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 $1901 for the targets of $1921 and $1945 with a stop loss placed below $1891. Longer term target $1963.
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.