Gold’s weekly outlook: May 01-05

Gold was very volatile last week where it fell from the highs of $1285 to a low of $1260 before settling at $1268. Gold gapped down on opening due to French election outcome followed by incremental selling which saw a brief buying at lower levels. This was sold into yet again pushing the prices lower to create a a double bottom which gave support to the metal thus allowing it to close significantly higher from the lows. Week was not convincing for it to be termed as bearish since the metal recovered from the lows aided by U.S policies regarding Tax reforms. Gold is expected to go higher next week if it manages to sustain above $1268 also helped with fresh tensions cropping up due to missile test conducted by North Korea on Saturday 29th.

On the chart –

Gold is clearly trading in a range of $1305 to $1238 marked by the channel a – b. Gold fell over $15 on the outcome of French election in last week but managed to close at the support of $1268 after creating a double bottom at $1260 levels which is seen as a positive for the metal. Next week might see some relief for the bulls but still the uncertainty prevails due to geopolitics. Possible 2 scenarios for the gold for next week –

1. Gold saw a selloff from the top and failed to sustain above $1278 even after recovering from the lows which provides a bearish signal. Yet again Gold is trading at a crucial point of $1268 (A) which seems to be a pivot point on the chart and if this point breaches gold can see further downside towards $1238 (B) which is a very good support area as its the lower end of the trading channel which gold is currently in. If this channel support fails to hold we may be heading towards the next support area of $1208 (C). Worst case if it happens, if gold slides below $1208 it can fall towards the big support area of $1196 (D) and then $1164 (E) but such moves are very very unlikely in the prevailing situations.

2. Gold’s closing at the support of $1268 (1) may be a bullish sign as a double bottom is in place at $1260 area and if this area holds it may provide a spring board to the prices to jump towards $1280 (2) which is a good resistance on the chart. If the bulls take out this mark on a conclusive basis gold is headed to fresh highs at $1305 (3). Some of this bullishness is due to the fresh tensions cropping up in North Korean Peninsula which if heats up can propel the prices even higher than $1305.

Bullish view – Bulls should be happy as they defended the $1260 zone twice and even managed to close at the support of $1268. Above the $1268 mark, it will make the bulls on top as it provides directive movement in gold to the upside towards $1280 and $1305 levels. Gold held on the support of $1260 in a bearish week which is an extremely bullish sign as a double bottom is formed there and the prices are expected to go higher amidst fresh tensions over North Korea and also technically.

Bearish view – Bears were at their best as they pegged back the prices over $15 from the high and managed to defend $1278 not allowing the bulls a freeway style recovery. Rejection of $1278 was considered as bearish and bears did what they were supposed to that is slackening the prices towards sub $1260s and even testing the support of $1260. Now if the Korean Peninsula tensions are tackled, a downtrend is expected for the metal towards $1238 zones.

On larger terms, Gold looks neutral to a fairly high bullish bias. Prices are expected to be volatile with an upward potential as tensions fail to give way to a smooth sailing.

Possible trades are on both sides, Gold can be bought around $1270 for the targets of $1280 and $1296 with a stop loss placed below $1260. Longer term target $1305.
Gold can be sold around $1260 for targets of $1248 and $1238 with a stop loss placed above $1270. Longer term target $1208.

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Gold’s weekly outlook: April 24-28

Gold was volatile in a range last week ending with minor cuts of half a percentage. Gold had opened higher but failed to keep the upward momentum before slackening towards sub 1270 and finally closing at the mid 1280 levels. Week went by can still be termed as a neutral for gold as no major directive moves had been noticed. Next week is a very eventful week as it has French elections to deal with along with the lingering geo-political tensions. Another volatile week expected for gold with big moves anticipated on either sides. Maybe most of the event might be priced into but spikes cannot be ruled out.

On the chart –

Gold fell $7 for the week to close at the support of $1284 after testing the top which can be a treated as a slightly bullish remark since gold went lower twice towards $1275-78 levels but failed to sustain there. Another uncertain week expected due to French elections for the gold so there are again 2 scenarios for the yellow metal –

1. Gold topped out according to the chart which is in a way a bearish sign as selling was clearly visible at such high levels entwined with lack of news flow regarding the tensions which was propelling the metal. Gold is at a very crucial point of $1284 (A) which if breached conclusively can result in a slump towards $1258 (B) zones which is a fairly good support for the metal now. If this area is taken out we can see more price action towards the $1244 (C) levels. Now if this level fails to hold we can see a drop towards $1218 (D) which is a very big support for the metal and such a move is very unlikely in the given circumstances with a reversal expected from $1229 levels if it falls so drastically.

2. Gold closed at the support of $1284 (1) which is a slightly good sign for the bulls since gold moved higher from the lows of $1275-78 twice before closing above the support area. If this area holds we can see more upward momentum towards $1303 (2) as uncertainty still looms favoring bullish bets. If this price point is crossed on a conclusive basis we can see a move towards $1330 (3) which is relatively far off but cannot be ruled out in an uncertain situation.

Bullish view – Bulls should be happy to take anything above $1284 as its a crucial pivot point for the directive move and they(bulls) have this in their favor. With French elections to kick-start next week, it adds another uncertain event to the continuing Korean peninsula tensions which seems to make a stronger point for the bulls in the coming week. Gold took support at $1278 levels indicating a floor might be in the making at $1270 levels. Prices are expected to rise amidst such uncertainties and important events.

Bearish view – Bears were on the top as Gold was unable to cross the $1298 making a top for the short term. Gold’s reversal from the top suggested selling pressure at higher levels making the bears more comfortable and aggressive as they eroded the price towards mid $1270 levels. If events dont go as predicted and tensions subside, a slide is widely anticipated towards $1258 levels.

On larger terms, Gold is still in uncertain waters with a neutral to slightly bullish bias. Prices are expected to be volatile and big moves are anticipated on either sides, preferably higher side taking into account the heightened level of uncertainty due to an additional event.

Possible trades are on both sides,  Gold can be sold at higher levels for targets of $1278 and $1258 with a stop loss placed above $1303. Longer term target at $1244 and $1218
Gold can be bought around $1285 for targets of $1298 and $1303 with a stop loss placed below $1275. Longer term target at $1330.

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Gold’s weekly outlook: April 17-21

Gold soared higher towards $1289 amidst fears and geo-political tensions aided by a comment made by the President of U.S on dollar being stronger partly because of him. There are fears that a war may spark off between North Korea and America as both the countries were very aggressive over their stance to defend their moves. War games often leads to a higher gold price but such spikes generally become key contenders for shorting as they are short lived as seen in previous episodes. There is no doubt gold will spark off towards very high levels in situation of a war but will it sustain is a very big question as they (war) cannot continue for longer duration.

On the chart-

Gold rose more than $30 breaking the channel on the upside, this channel a-b has a high of $1346 (a) and a low of $1220 (b) which now acts as a base or a good support for the yellow metal. In an uncertain situation gold can move in any direction irrelative of the fact that it may have broken support/resistances/channels. There are two scenarios on the movement of gold-

1. Gold is facing a resistance at $1289 (A) levels, if tensions are cooled off gold can slide down towards $1260 (B) which is now assumed to be a point of reversal in gold but it may find short term supports at $1278 and $1267 levels before finally giving up to the $1260 zone. Now if this price point fails the gold can fall downwards to $1235 which is a good support for the metal and such a move is unlikely seeing the demand for gold at lower levels.

2. Gold has broken the channel on the upside which is a very positive sign for the price movement. Gold closed above $1289 (1), this indicates it can move higher towards $1305 (2) which though is a very good resistance point on the chart. If this zone is successfully crossed we can have an upmove towards $1322 (3). 

Such a large weekly bar is often followed with incremental gains so for short term a move towards $1305 is highly likely unless any sudden development on geo-political issues take place.

Bullish view – Bulls would be rejoicing the fact that they have crossed major resistances on the chart and have closed above the $1289 mark which indicates more positive momentum for them along with pertaining fears over a war which if becomes true it will sky rocket the gold prices. Comments on dollar being stronger wrongly is also a key motivator for the bulls. Price is expected to rise in such uncertainty in globe which also is a casing point for bulls.

Bearish view – Bears were trapped in the surge which took last week but they should still be happy as the $1289 level was not taken down decisively which means gold is losing steam on higher levels. Zone of $1289 is a fairly good resistance and a reversal is expected from here as it is assumed to be a cap for the gains unless war situation heats up sending gold higher. If tensions subside a reversal towards $1260 is widely anticipated.

On larger terms, Gold is in a volatile mode with neutral bias. Prices are expected to be very volatile taking into account the tensions which is reaching a boiling point. Gold can have a wild week with big moves expected on the either side, preferably on the upside.

Possible trades are on both sides, Gold can be sold at higher levels for targets of $1278 and $1260 with stop loss placed above $1305. Longer term target at $1235 and $1220.
Similarly, Gold can be bought around $1291 for the targets of $1305 and $1322 with stop loss placed below $1278. Longer term target at $1346.

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Gold’s weekly outlook: April 10-14

Gold saw a volatile range bound trade last week with prices moving in a $20 band excepting the false spike towards the $1270 levels due to geo-political issue which got sold into intraday. Gold was chopping around giving no clear direction as demand was slowing when the prices moved higher resulting in a no-show week for the precious metal. Views about its future course is split but has a bearish bias attached since it was unable to stay above the crucial $1262 mark even after the momentous spike.

On the chart-
Gold is trading in-between the boundaries of $1262 and $1241, a breakout from this trading range is required to  give a clear path. Gold tested the top of the channel at $1273 (A) which seems to be a cap for the moment until gold breaks out on the upper side. Gold has a support at $1241 (B) which held on the last week , but if we see this mark break gold can slide towards its next support at $1229 (C) which is a very important mark as a reversal from here is quite possible. A failure to hold may result into further selling towards $1218 then $1196 (D) as $1200 seems to have developed as a floor for the prices. If things go out of hand fundamentally and globally the metal can slide towards $1188 (E) and $1160 (F) which is very unlikely at the moment.

There could be a rounding top formation on the chart which itself sings a bearish tone.

Another thing to look on the chart is the pattern repetition as indicated with circles, according to the pattern we might be seeing a fall of $25-$30 which could be followed by buying at lower levels.

Bullish view – Bulls can take heart from previous week’s price movement as they were able to defend $1241 and even broke above $1262 intraday. If the price gets defended at $1241 continuously we maybe in for a new high sooner than expected which is a valid point for the bulls. A head and shoulder formation on the chart is also favorable for the bulls.
Another bullish aspect is a reversal from $1229, expectancy of which is very high and new highs can be reached if such a move occurs.

Bearish view –  Bears were at their best as the price dropped from the highs of $1270 to close under $1262 which gives extra ammunition as the daily candle formation is very bearish due to such extreme moves. A higher dollar is also favoring the bears along with pattern repetition and failure to break $1262 4th time. A fall towards $1229 is widely expected.

On larger terms, Gold is still in a sideways mode with a bearish bias. Prices are expected to fall towards $1229 once the $1241 supports gives way, then a reversal is expected which will take the price towards new highs. For the shorter term gold should move higher towards $1260 to complete the “Head and Shoulder” formation from where a fall is anticipated.

Possible trades are on both sides , Gold can be sold at higher levels for the initial targets of $1241 and $1229 with a stop place above $1263 mark. Longer term target $1200.
Similarly Gold can be bought around $1229 for the targets of $1241 and $1263 with a stop placed below $1218. Longer term target $1305

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Gold’s weekly outlook: April 03-07

Gold prices took a bumpy ride last week where it moved higher towards $1260 in the earlier half of the week before falling towards the lows of $1238 during the end of the week then finally settling at $1247.3 . There was a massive fight between the bulls and the bears on Friday where bulls were able to win the final say as the price recovered nearly $10 from the lows which could provide some sort of satisfaction to them in regards of keeping the momentum going. But the week ended sideways with signs of bearishness starting to show.

On the chart-
Gold saw a big surge as the prices hit $1260 but failed to sustain thus creating a double top which is regarded as a very negative sign for the price movement and lower levels could be on the cards.
Gold has a high at $1280 (A) on the chart, path to which is only possible if the gold crosses the $1262 mark on the closing basis which is looking unlikely at the moment. Gold saw tiredness at higher levels where it failed to hold $1256 (B) which can lead to a possible breakdown in prices. If the price breaks the $1241 (C) on conclusive basis it can go towards its next support at $1218 (D). And if this price point which can be said as a fairly good support fails to hold the downtrend can continue towards $1205 (E). If such a bearish move happens it opens the gate for gold to even sink lower towards the huge support area of $1182 (F) from where a reversal could be possible.
On the flip side if gold gets support at $1218 and fundamentals are supportive , we may see a reversal starting from here which may take the gold to newer highs and even beyond $1305.

An optimist view: Gold is currently in no man’s land as it is split between the support and the resistance, with the momentum seen on Friday bulls have an outside chance to keep the rally alive and go towards $1280 levels

On larger terms, Gold looks bearish with prices expected to fall since $1260 level got rejected twice creating a double top. Gold can move lower with the targets of $1235 and $1220 in short/medium term and $1180 as a longer term target. Though a rally above $1256 might help the metal touch the top of the range at $1280.

Possible trades are on the downside, gold can be sold for the initial target of $1235 and $1220 with a stop loss placed at $1258. Longer term target for the metal is $1200 which may act as a good barrier for the bears which if taken out may result in a waterfall style fall towards $1182.
Positional traders can use this dip to accumulate the metal for the next leg of the upmove which will take the Gold prices to newer highs and even cross the psychological $1305 mark in coming weeks/months.

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