Gold had a roller coaster ride in the past week touching both support and resistance when it whipsawed nearly $40 but managed to close with a minor cut of $7. The 20 day moving average was once again respected in weekly timeframe and it gave the metal the boost it required to rebound from the lows of $1300s. Such a move from lows again was purely on technical grounds and a possible triple bottom has been formed suggesting the $1300 mark wont be easy to break.
On the chart –
Gold’s behavior was very confusing as both bulls and bears had their share but none managed to make a clear impact thus making way for more sideways and range-bound trade. There is a lot going on fundamentally which can impact gold on either direction as the news flow from U.S is quite influencing. We have 2 scenarios –
1. Gold had a bitter crash from the highs but managed to latch on to the 20 day moving average and rebounded from there. If the movement on upside remains strong and if its able to take out $1331 it can head towards $1345. If this is crossed it can rally to $1358. And if this mark is conquered it can rise towards $1374.
2. Short trades are not the flavor but if $1331 is rejected it can fall towards $1317. If this support fails to hold it can fall back to $1308 which is looking very less likely given the past week moves.
Bullish view – Bulls were rocked hard this time as the prices dropped from the highs of $1340 to $1300 without any retracement, but they fought back hard once the support of 20 day moving average paused the selling pressure and it reversed from there closing above the resistance at $1317 for the week. This happened for the third time when the bulls were able to defend $1300 thus keeping gold safely into their grip. If bulls manage to cross $1331 then they can make the situation to favor them and the upside momentum can resume.
Bearish view – Bears pummeled the bulls as they eroded nearly $40 without any respite but failed to keep up the pressure at the closing for the week suggesting they may be tired after such a big move. But if they manage to defend $1317 then ball would be in their court and the prices may see a drop but contained within $1300.
On larger terms, Gold remains sideways as no clear direction is visible since the price is cradled between the support and the resistance. Need a break on either side for a clear direction.
Possible trades are on both sides but largely on long side, gold can be bought above $1337 for the targets of $1345 and $1358 with a stop loss placed below $1331. Longer term target $1374.
There are no short trades unless $1317 breaks, and if it does still its limited to $1308.
On the chart –
Gold’s behavior was very confusing as both bulls and bears had their share but none managed to make a clear impact thus making way for more sideways and range-bound trade. There is a lot going on fundamentally which can impact gold on either direction as the news flow from U.S is quite influencing. We have 2 scenarios –
1. Gold had a bitter crash from the highs but managed to latch on to the 20 day moving average and rebounded from there. If the movement on upside remains strong and if its able to take out $1331 it can head towards $1345. If this is crossed it can rally to $1358. And if this mark is conquered it can rise towards $1374.
2. Short trades are not the flavor but if $1331 is rejected it can fall towards $1317. If this support fails to hold it can fall back to $1308 which is looking very less likely given the past week moves.
Bullish view – Bulls were rocked hard this time as the prices dropped from the highs of $1340 to $1300 without any retracement, but they fought back hard once the support of 20 day moving average paused the selling pressure and it reversed from there closing above the resistance at $1317 for the week. This happened for the third time when the bulls were able to defend $1300 thus keeping gold safely into their grip. If bulls manage to cross $1331 then they can make the situation to favor them and the upside momentum can resume.
Bearish view – Bears pummeled the bulls as they eroded nearly $40 without any respite but failed to keep up the pressure at the closing for the week suggesting they may be tired after such a big move. But if they manage to defend $1317 then ball would be in their court and the prices may see a drop but contained within $1300.
On larger terms, Gold remains sideways as no clear direction is visible since the price is cradled between the support and the resistance. Need a break on either side for a clear direction.
Possible trades are on both sides but largely on long side, gold can be bought above $1337 for the targets of $1345 and $1358 with a stop loss placed below $1331. Longer term target $1374.
There are no short trades unless $1317 breaks, and if it does still its limited to $1308.