Gold moved higher crossing $1900 briefly mainly on back of a lower dollar and substantial rise in uncertainty due to the spreading of the second strain of coronavirus which forced a near total lockdown of the United Kingdom where as other countries were also pushed to take measures to curb the spread of new virus strain though it has already reached in many parts of the world. This spread of the new strain also raises the question of the viability of the vaccines launched earlier though the companies are confident about its use against the new coronavirus still the vaccines are being tested once again on the fresh strain which does nothing but raises the already heightened uncertainty. Apart from the pandemic, another news flow/event of concerning nature evolves around President Donald Trump (who has less than a month of office remaining) as he rejected the coronavirus relief bill which would lead to the shutdown of the government if not vetoed in coming days. Situation across the globe remains precarious as the virus is still not giving any breathing space to the already battered economies and with winter the next few months would be pretty difficult which should provide ample push to the gold prices on the upside. Plus as the year nears the end not much should be expected as generally the holiday mood distances investors/traders from the markets in this patch. To watch next week – Coronavirus bill and other important economic data.
On the chart –
Gold remained indecisive as it was confined between the support and the resistance. This type of move might look orderly given the time of the year where most people have book closures and a holiday mood. Again a higher high and a cross of $1900 even though briefly depicts the ongoing trend. Gold still remains in the flag/consolidation whose high was tested last week and its largely expected that the flag should break on the upside quite soon given the ongoing fundamentals and the obvious technical push of smaller breakouts. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1886. If this is crossed it can move towards $1901. And if this is taken out it can rally to $1921.
2. Bearish bets still don’t find any value except scalp trades given the ongoing trend.
Bullish view – Bulls pushed the price above $1900 with quite a force but failed to stay afloat above it as the flag resistance/top proved quite stubborn on the first try along with the holiday mood/book closures which dampens regular activity. The bar formed shows indecisiveness but the close suggests otherwise providing the bulls enough faith to again try and break the ongoing weekly flag. The fundamentals show strong support to the bulls as the pandemic and other political activities continue to raise uncertainty while the technicals continue to remain bullish due to smaller breakouts and once the flag is broken then the bulls will have total say over the yellow metal with new high on the cards.
Bearishness still fails to entice as the trend remains bullish.
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 $1881 for the targets of $1886 and $1901 with a stop loss placed below $1871. Longer term target $1921.
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 remained indecisive as it was confined between the support and the resistance. This type of move might look orderly given the time of the year where most people have book closures and a holiday mood. Again a higher high and a cross of $1900 even though briefly depicts the ongoing trend. Gold still remains in the flag/consolidation whose high was tested last week and its largely expected that the flag should break on the upside quite soon given the ongoing fundamentals and the obvious technical push of smaller breakouts. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1886. If this is crossed it can move towards $1901. And if this is taken out it can rally to $1921.
2. Bearish bets still don’t find any value except scalp trades given the ongoing trend.
Bullish view – Bulls pushed the price above $1900 with quite a force but failed to stay afloat above it as the flag resistance/top proved quite stubborn on the first try along with the holiday mood/book closures which dampens regular activity. The bar formed shows indecisiveness but the close suggests otherwise providing the bulls enough faith to again try and break the ongoing weekly flag. The fundamentals show strong support to the bulls as the pandemic and other political activities continue to raise uncertainty while the technicals continue to remain bullish due to smaller breakouts and once the flag is broken then the bulls will have total say over the yellow metal with new high on the cards.
Bearishness still fails to entice as the trend remains bullish.
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 $1881 for the targets of $1886 and $1901 with a stop loss placed below $1871. Longer term target $1921.
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 $1886