Gold had another successful green week where it created a fresh higher high as the falling dollar lent its support apart from the blooming bullish technicals. The week saw the Fed chair reaffirming a strong growth forecast along with allaying fears of rising inflation with terming any increase to be temporary which funneled a rally across asset classes except the dollar which had a negative outing. With technical support only getting stronger, the fundamentals seem to match it as situation across globe gets gloomier with every passing day as the pandemic continues to wreck havoc with the 2nd wave claiming more lives than the first. Economic setbacks loom large with many countries in a state which demands a lockdown to curb the spread and mainly reduce the pressure on the overwhelmed medical facilities as many people are not adhering to any measures which is only worsening the situation. This again is the chapter where the uncertainty continues the climb which is a positive for the yellow metal as it remains the safest bet in such times. To watch next week – Earnings season, Inflation figures, Fed speakers and other important economic data.
On the chart –
Gold continued to build on the last week’s ultra bullish reversal candle as it added $10 for the week which saw a higher high as well. The close seems to provide another signal for prolonged bullishness as it broke the consolidation in lower timeframes which was successfully retested as well. In an expressive picture, it looks like a cup and handle in formation which if broken would just pile up the bullish cases as the major reversal signal of the double bottom formation got confirmed few days ago with only one large bullish breakout remaining – the flag/consolidation going on since weeks. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1755. If this is crossed it can move towards $1771. And if this is taken out it can rally to $1789.
2. Bearish bets still don’t find any value except scalp trades given the ongoing trend.
Bullish view – Bulls had a successful outing as they created a higher high though unable to close at such highs still it remains a cause of celebration since another consolidation breakout has been achieved which affirms bullishness. For bulls, the technicals have come into full support which was missing sometime back while the fundamentals continue to demand higher prices since the pandemic is still at large with its 2nd wave getting uglier and deadlier even after lot of vaccination drives across the globe as the virus continues to mutate forcing countries to adopt lockdowns (even if partial) again as medical facilities remain at overwhelmed state. In simpler terms gold again got a new set of wings to fly.
Bearishness remains cornered due to continuous bullish breakouts.
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 $1746 for the targets of $1755 and $1771 with a stop loss placed below $1737. Longer term target $1789.
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 continued to build on the last week’s ultra bullish reversal candle as it added $10 for the week which saw a higher high as well. The close seems to provide another signal for prolonged bullishness as it broke the consolidation in lower timeframes which was successfully retested as well. In an expressive picture, it looks like a cup and handle in formation which if broken would just pile up the bullish cases as the major reversal signal of the double bottom formation got confirmed few days ago with only one large bullish breakout remaining – the flag/consolidation going on since weeks. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1755. If this is crossed it can move towards $1771. And if this is taken out it can rally to $1789.
2. Bearish bets still don’t find any value except scalp trades given the ongoing trend.
Bullish view – Bulls had a successful outing as they created a higher high though unable to close at such highs still it remains a cause of celebration since another consolidation breakout has been achieved which affirms bullishness. For bulls, the technicals have come into full support which was missing sometime back while the fundamentals continue to demand higher prices since the pandemic is still at large with its 2nd wave getting uglier and deadlier even after lot of vaccination drives across the globe as the virus continues to mutate forcing countries to adopt lockdowns (even if partial) again as medical facilities remain at overwhelmed state. In simpler terms gold again got a new set of wings to fly.
Bearishness remains cornered due to continuous bullish breakouts.
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 $1746 for the targets of $1755 and $1771 with a stop loss placed below $1737. Longer term target $1789.
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 $1755
Comment:
Second long target met at $1771