Gold finally paused after the stellar rally as it moved in a range of $55 cradled between the support and the resistance posting a negative return of $10 after 6 weeks. The fall was on account of better than expected payroll data which reduced the likelihood of a rate cut in the next Fed meet allowing the dollar index to move higher. But even amongst such fundamental developments gold did not break the support on closing basis indicating the trend hasn’t been affected though a close below $1400 mark may pinch the bulls. Important event lined up in next week – “Fed chair Powell testifies”.
On the chart –
Gold may have entered into time correction/consolidation after 6 weeks of vertical upside which is quite normal given the size of the rally. We have 2 scenarios –
1. Gold closed above the support, till this is held it can move till $1406. If this is crossed it can rally till $1412. And if this is taken out it can move towards $1420 and finally $1434.
Short trades still don’t fit into the picture as supports were held and trend remains far too bullish for any counter-trend trade except scalping.
Bullish view – Bulls attempted a jab at the highs again but failed to register a new one allowing consolidation to kick in as buying was not visible at the highs. Still they managed a good closing perfectly above the breakout area which suggests buying at the lows as slowdown fears continue to grip the globe even after a successful G20 summit and U.S – China trade talks. For bulls to keep continuing higher they need to defend the supports as well as aim for new highs as technicals and fundamentals are very much favorable for them.
Bearishness remains off the table as broad trend remains ultra bullish.
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 $1406 for the targets of $1412 and $1420 with a stop loss placed below $1392. Longer term target $1434.
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 may have entered into time correction/consolidation after 6 weeks of vertical upside which is quite normal given the size of the rally. We have 2 scenarios –
1. Gold closed above the support, till this is held it can move till $1406. If this is crossed it can rally till $1412. And if this is taken out it can move towards $1420 and finally $1434.
Short trades still don’t fit into the picture as supports were held and trend remains far too bullish for any counter-trend trade except scalping.
Bullish view – Bulls attempted a jab at the highs again but failed to register a new one allowing consolidation to kick in as buying was not visible at the highs. Still they managed a good closing perfectly above the breakout area which suggests buying at the lows as slowdown fears continue to grip the globe even after a successful G20 summit and U.S – China trade talks. For bulls to keep continuing higher they need to defend the supports as well as aim for new highs as technicals and fundamentals are very much favorable for them.
Bearishness remains off the table as broad trend remains ultra bullish.
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 $1406 for the targets of $1412 and $1420 with a stop loss placed below $1392. Longer term target $1434.
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 $1412
Comment:
Second long target met at $1420
Trade closed: target reached