Gold made another $100 plus candle on back of a falling dollar nestled between the support and the resistance with actual movement being less than $5. Once again price movement reiterated the trend as the support remained firm with buying emerging at every dip. One can point out the rejection of $2000 but again it can be treated as flushing out retail longs before going higher which is often the case in every asset class. Coming to fundamentals, the globe remains challenged by the pandemic which maybe formally entering into 2nd wave as many countries are overwhelmed by a spike in fresh cases while geopolitical risks continue to weigh on the economies. On the positive side a new method of cure might be in place soon as early vaccine hopes remains dashed. Net net the scenario remains as it is rather its worsening which should augur well for gold. To watch next week – Jackson Hole Symposium and other important economic data.
On the chart –
Gold made an inside pin bar candle which suggests the low might be in and uptrend should restart once the high (of pin bar candle) is taken out. In another viewpoint it is in consolidation/flag which again will prove into a directive move once it breaks. With support being held in all the falls it is quite likely the breakout would happen on the upside as it is fundamentally supported as well. Also the inverse head and shoulders breakout remains respected adding to the bullish imprint. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1963. If this is crossed it can move towards $1989. And if this is taken out it can rally to $2008.
2. Short bets remain unwanted in such a scenario except scalp trades.
Bullish view – Bulls fired up above $2000 after a five day gap but were unable to sustain as the price corrected back towards the support on back of a retracing dollar. The move may look ugly but its pleasantly bullish as the candle formed suggests a reversal and a near term bottom formation. The main factor moving the prices higher is the ample liquidity and its aftermath which should remain consistent till the end of 2022 or until the Fed takes a u-turn on its easing policy. As mentioned above the uncertainty surrounding global growth due to the pandemic remains a worrying factor along with the cross border tensions which should keep gold fundamentally lifted while technicals remain strongly supportive of higher prices with $2700 plus being a mid – longer term outlook.
Bearishness continues to remain out of context.
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 $1945 for the targets of $1963 and $1989 with a stop loss placed below $1932. Longer term target $2008.
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 made an inside pin bar candle which suggests the low might be in and uptrend should restart once the high (of pin bar candle) is taken out. In another viewpoint it is in consolidation/flag which again will prove into a directive move once it breaks. With support being held in all the falls it is quite likely the breakout would happen on the upside as it is fundamentally supported as well. Also the inverse head and shoulders breakout remains respected adding to the bullish imprint. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1963. If this is crossed it can move towards $1989. And if this is taken out it can rally to $2008.
2. Short bets remain unwanted in such a scenario except scalp trades.
Bullish view – Bulls fired up above $2000 after a five day gap but were unable to sustain as the price corrected back towards the support on back of a retracing dollar. The move may look ugly but its pleasantly bullish as the candle formed suggests a reversal and a near term bottom formation. The main factor moving the prices higher is the ample liquidity and its aftermath which should remain consistent till the end of 2022 or until the Fed takes a u-turn on its easing policy. As mentioned above the uncertainty surrounding global growth due to the pandemic remains a worrying factor along with the cross border tensions which should keep gold fundamentally lifted while technicals remain strongly supportive of higher prices with $2700 plus being a mid – longer term outlook.
Bearishness continues to remain out of context.
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 $1945 for the targets of $1963 and $1989 with a stop loss placed below $1932. Longer term target $2008.
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 $1963