Gold had an ugly week with $1700 broken on closing basis primarily due to better than expected jobs data from the U.S which further increased the appetite for riskier assets. Also helped the fall was the reopening of the economies worldwide which led to increased demand of commodities indicating growth. All the bad news revolving around increasing virus cases with few countries experiencing 2nd wave of infections or are in line to, geopolitical tensions and constant warning/signs of slowing economies have been totally neglected or say overridden by just a set of positive news which is also rumored to be erroneous. This spin off certainly doesnt provide any sanity or a correct path of trajectory for either riskier or risk free asset class rather adds to dilemma of investors atleast on fundamental basis. This rise in riskier asset class may be seen as a euphoric move which could be based on the idea of free money and the ever green “left out feeling” and probably the path for elections which set for November. Even if fundamentals are overlooked, technicals remain in favor of bulls in spite of the break of $1700. To watch next week – Fed meeting and other important economic data.
On the chart –
Gold had a nasty $75 ranged red week where it failed to hold $1700 on closing basis due to a better than expected economic data. Technically, the fall was arrested at the earlier breakout zone with the metal finally closing above crucial support level which remains a bullish sign. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1685. If this is crossed it can move towards $1698. And if this is taken out it can rally to $1716 and next $1727.
2. Short trades remain dull as the support was held except scalp trades but a failure to hold might lead to $1643.
Bullish view – Bulls were finally cornered as the prices breached $1700 with quite some force ending the 4 week stay. This is not a pleasing sight at all but again bulls defended the earlier breakout and infact had a closing above the support in daily timeframe which should act as a good push for going forward again. This support area becomes a crucial one to hold and if broken it could lead the metal lower, so the bulls need to protect the supports for moving higher and till its held a brisker march towards $1800 cannot be ruled out.
Bearishness still remains captive, but once freed (support breaks) it can lead the metal lower towards the 20 dma.
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 $1685 for the targets of $1698 and $1716 with a stop loss placed below $1673. Longer term target $1727.
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 nasty $75 ranged red week where it failed to hold $1700 on closing basis due to a better than expected economic data. Technically, the fall was arrested at the earlier breakout zone with the metal finally closing above crucial support level which remains a bullish sign. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1685. If this is crossed it can move towards $1698. And if this is taken out it can rally to $1716 and next $1727.
2. Short trades remain dull as the support was held except scalp trades but a failure to hold might lead to $1643.
Bullish view – Bulls were finally cornered as the prices breached $1700 with quite some force ending the 4 week stay. This is not a pleasing sight at all but again bulls defended the earlier breakout and infact had a closing above the support in daily timeframe which should act as a good push for going forward again. This support area becomes a crucial one to hold and if broken it could lead the metal lower, so the bulls need to protect the supports for moving higher and till its held a brisker march towards $1800 cannot be ruled out.
Bearishness still remains captive, but once freed (support breaks) it can lead the metal lower towards the 20 dma.
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 $1685 for the targets of $1698 and $1716 with a stop loss placed below $1673. Longer term target $1727.
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 $1698
Comment:
Second long target met at $1716
Comment:
Third long target met at $1727
Comment:
Forth target met at $1740