Gold ended 2020 on a strong note having a green week closing just shy of $1900 broadly on heightened uncertainty and a down-trending dollar. The current situation of the world remains conducive of higher gold price as the pandemic is still not showing any signs of weakening even after 10 months which spills over as a grave problem point in the 2021 as well even after multiple vaccine rollout(s), and such is the ferocity that most countries are experiencing a deadly 2nd wave which has forced them to again invoke strict restrictions and even partial to full lockdown(s) in badly affected areas which would not only impact the already battered economies but again stretch the disparity which would be impossible to heal. Not only this but geopolitical activities too continue to fuel uncertainty as well. With U.S presidency to change from 21st Jan, it will likely bring more confusion due to the President Elect’s mandate which seems to be directly opposite to Donald Trump’s actions. All this chaos would likely not be sorted that easily even if more than half of the world is vaccinated at a pretty brisk rate with gold staying as the best investment asset class given its safe haven nature for a much longer time. To watch next week – Opec meeting and other important economic activities.
On the chart –
Gold made a closing high again testing the flag/channel top and ending just below it. A mere push would force the gold out of its 22 week consolidation and such can be achieved with a gap up which is generally the case with such large consolidation breakouts. All the levers (technically and fundamentally) look set for the breakout and once it is achieved then the bull run will get a new set of wings and it would definitely move towards a new high in lesser time than expected. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1901. If this is crossed it can move towards $1921. And if this is taken out it can rally to $1945.
2. Bears will have no chance once the flag/consolidation breaks on the upside except scalp trades.
Bullish view – Bulls tried again to capture $1900s but failed to do so as the flag resistance still remains a substantial hurdle which would be easy to conquer with a gap up and it is becoming the most likely scenario as gold ended extremely close to the top of the channel/flag. Fundamentals play their part in supporting higher gold price as the pandemic created situation(s) is only worsening even after vaccine rollout and it doesn’t look to sober down any time soon as the second wave is proving more deadly than expected. With a massive breakout in sight and ailing fundamentals bulls have their feet in the runner’s shoes.
Bearishness continues to remain out of context.
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 $1902 for the targets of $1921 and $1945 with a stop loss placed below $1893. 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 made a closing high again testing the flag/channel top and ending just below it. A mere push would force the gold out of its 22 week consolidation and such can be achieved with a gap up which is generally the case with such large consolidation breakouts. All the levers (technically and fundamentally) look set for the breakout and once it is achieved then the bull run will get a new set of wings and it would definitely move towards a new high in lesser time than expected. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1901. If this is crossed it can move towards $1921. And if this is taken out it can rally to $1945.
2. Bears will have no chance once the flag/consolidation breaks on the upside except scalp trades.
Bullish view – Bulls tried again to capture $1900s but failed to do so as the flag resistance still remains a substantial hurdle which would be easy to conquer with a gap up and it is becoming the most likely scenario as gold ended extremely close to the top of the channel/flag. Fundamentals play their part in supporting higher gold price as the pandemic created situation(s) is only worsening even after vaccine rollout and it doesn’t look to sober down any time soon as the second wave is proving more deadly than expected. With a massive breakout in sight and ailing fundamentals bulls have their feet in the runner’s shoes.
Bearishness continues to remain out of context.
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 $1902 for the targets of $1921 and $1945 with a stop loss placed below $1893. 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.
Trade active
Comment:
First long target met at $1921
Comment:
Second long target met at $1945