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Gold tests resistance at 21DMA, optiion tunnels to speculate

FX:XAUUSD   Gold/U.S. Dollar
163 0 7
Technical Inference:

It’s been quite a lot baffling gold’s prices when you consider short, medium and long-term trends.

Although the precious yellow metal has spiked during early Asian sessions today could not hold onto the resistance at 1250 levels and slide below 21DMA again.

Price opened at 1244.14 which is approximately near 21DMA, the current prices are testing these levels as resistance. From last 3 and half months or so, the prices have been oscillating between 1294.50 and 1200 range.

We could certainly deem Friday’s rallies as deceptive attempts of bulls on improved unemployment claims as you could clearly make out that there is no volumes conformity. Long term investors in bullion should certainly wait for better clarity for optimal entry points.

While both leading oscillators on monthly signal extreme indecisiveness.

RSI , stochastic curves have been suggesting an absolute non-directional trend to prevail, as a result, you can see current price behavior on monthly drifting in sideways.

While MACD remains in a  bearish trajectory that is likely to drag down further.

Bears in Gold             has wiped off buying interest again and been tumbling consecutively from the last couple of day, we could foresee next immediate supports at 1225 levels.

Trading tips:                                                                          

Those who’re suspicious of bearish sentiments in bullion markets can speculate yellow metal with option tunnel construction for the targets at 1225 levels.

Currently trading at 1241.13 but no wonder if it hits 1225 zone sooner or later ahead of Fed chief Yellen’s speech later during US trading session.

We recommend deploying the option tunnel using ATM puts that are structured as a binary version of a conventionally put spreads, i.e. long delta puts with higher strikes while writing the lower strikes for above-mentioned targets on either side.

Therefore, an In-The-Money tunnel would be formed of an In-the-money -0.71 delta put below the spot rates less an Out-Of-The-Money put above spot rates. The delta of -0.51 on combined position with theta is preferred to be near zero.
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