Gold made a 4th consecutive green candle closing above $1900 (weekly close) after a long gap of 27 weeks as the dollar remained weak. The move in the gold was more of a technical push than anything else but the inflation fears and the ongoing pandemic led disturbed fundamentals also helped in the rise. As countries continue to lighten restrictions on back of full vaccinations, it still remains oddly unclear whether the newer variants are skillful enough to bypass the inoculations easily which might pose a larger threat to the exposed population. If one event softens a bit another is ready to take up the lead to keep the uncertainty heightened as now the Wuhan China angle has resurfaced over the origin of the virus which could again mount geopolitical tensions between U.S and China. Thus the world continues to remain in the clutches of uncertainty which makes the yellow metal an easy sought after given its safe haven characteristics. To watch next week – Fed speakers, inflation data, OPEC meet and other important economic data.
On the chart –
Gold finally closed above $1900 for the week after a lengthy wait as the technicals continued to push the price higher. The price has hit a minor resistance area though a small gap up might be enough to overcome it as the major resistance lies still ahead. In a probability, gold might try an inverse head and shoulders pattern if the price fails to take out the resistance at $1960-70 which again if happens is another towering bullish sign. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1921. If this is crossed it can move towards $1945. And if this is taken out it can rally to $1963.
2. Bears remain out of the picture given the trend except scalp trades.
Bullish view – Bulls reclaimed $1900 on closing basis after a gap of 27 weeks on back of a muted dollar. The move was aided by supportive fundamentals arising from fresh geopolitical tensions and continued uncertainty due to the ongoing pandemic which is failing to fade. For bulls it can be seen as a huge victory as $1900 was a big psychological level which was difficult to cross in the recent past, now that it has been taken out on weekly timeframe the confidence of bulls should be at a new high and surging forward might not be that difficult. Only cause of worry is the upcoming resistance area which if taken out can propel the metal higher at a faster pace.
Bearishness still fails to entice.
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 $1906 for the targets of $1921 and $1945 with a stop loss placed below $1897. 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 finally closed above $1900 for the week after a lengthy wait as the technicals continued to push the price higher. The price has hit a minor resistance area though a small gap up might be enough to overcome it as the major resistance lies still ahead. In a probability, gold might try an inverse head and shoulders pattern if the price fails to take out the resistance at $1960-70 which again if happens is another towering bullish sign. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1921. If this is crossed it can move towards $1945. And if this is taken out it can rally to $1963.
2. Bears remain out of the picture given the trend except scalp trades.
Bullish view – Bulls reclaimed $1900 on closing basis after a gap of 27 weeks on back of a muted dollar. The move was aided by supportive fundamentals arising from fresh geopolitical tensions and continued uncertainty due to the ongoing pandemic which is failing to fade. For bulls it can be seen as a huge victory as $1900 was a big psychological level which was difficult to cross in the recent past, now that it has been taken out on weekly timeframe the confidence of bulls should be at a new high and surging forward might not be that difficult. Only cause of worry is the upcoming resistance area which if taken out can propel the metal higher at a faster pace.
Bearishness still fails to entice.
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 $1906 for the targets of $1921 and $1945 with a stop loss placed below $1897. 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.