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.