Gold has been on the rise since the beginning of this year on multiple global factors which may continue to support the uptrend in the remainder of the year. Gold saw a ‘V’ shaped recovery from its low and yet again another similar pattern has formed after the profit taking the metal saw after hitting a high of $1263 in the past weeks.
On the chart-
# Gold is trading near highs of the trading range which has a top of $1280 (A) and a bottom of $1208 (B). The high of $1280 (A) is also confirmed by intersection of the ray lines indicating the metal may find a fair resistance at those levels.
# Gold is still upbeat regardless of significant up-moves in dollar index which generally is seen as a negative.
# Gold had formed a floor at $1200 thus making it a good support for the metal, this can now be shifted to $1208 (B) which is the lower end of the trading range.
# Another point of interest for the metal is the $1218 (C) which should now act as a reasonable support as it is a very crucial level which if taken out may signal a bearish tone if the metal fails to garner support of investors near the lower end of the range.
# A massive support for the metal is seen at $1182 (D) which could be revisited if all the supports and fundamentals are broken. A point of interest for the Bears which if fails to hold we might see the metal falling to the lows of $1136. Chances of such a move is very slim but nothing must be fully ruled out.
# Possible Trades-
Positional trades can be buying the metal in the range $1235-$1252 for possible targets of $1280 & $1305 and even higher with a stop loss at $1217 for mid/long term.
If the metal breaks the $1268 on the upside, it can still be bought for the above mentioned targets with a stop loss at $1244.
For positions held from $1218 stop loss should be at $1200
Metal is in a bull run and shorting it for positional returns is not suggested due to low risk-reward and prices tend to move higher after a brief correction in this type of market unless there is any event which might shake the charts for a different outlook altogether.