Gold staged a stellar recovery from the lows of $1240s to close significantly higher at $1256 adding gains for the week. Gold fell to a 5 week low in the start of the week but managed to plow back the loss as buying at lower levels was clearly visible along with poor data coming out of America which aided the metal to erase the losses. Gold broke the bearish pattern with such a candle formation which points to a casing victory for the bulls and signalling further gains ahead.
On the chart –
Gold saw through the incremental selling in the start of the week which initiated buying at lower levels fueling the prices back above the crucial $1249-$1251 zone which was a technical area for reversal as mentioned in the earlier weekly review. Candle formed suggests trend reversal as selling got arrested and gold bounced from the lows. The circle denotes the range gold is expected to trade in. As per above situation gold has 2 scenarios but it points to bullishness over bearishness –
1. Gold bled in the start of the week but was followed with incremental buying at lower levels which propelled the prices higher adding gains for the week. Such a move was widely expected on account of Fib retracement. If this momentum continues gold is expected to rise to $1269 (A) where it may find some resistance. If this price point is crossed gold can move forwards to $1278 (B). And if situation favors gold, prices can move higher to highs of $1298 (C) which will act as a good resistance.
2. Short trades are not the flavor of the week nor advisable but still gold can slide to $1248 (1) once $1251 is broken as it lends good support to the prices. If this level gives way gold can fall further to $1241 (2). And if things turn for worse gold can see more downside towards $1227 (3) which is a good support on the chart.
Bullish view – Bulls were never out of the game as they held the crucial $1241 level and prices rebounded from such lows. A buy on dips/lower level buying was clearly visible since the fall was bought into and the downside got arrested. Gold was following the pattern which it created when it started to fall from the highs but the pattern got dismantled suggesting trend reversal which is extremely positive for the bulls. This buying pressure should continue and gold is expected to move higher in the coming week.
There is nothing bearish which is notable thus a view on the same cannot be taken into account seeing the weekly price movement and candle formation.
On larger terms, Gold has turned bullish with prices expected to move higher towards $1278.
Possible trades are on both sides but preferably on the longer side, Gold can be bought around $1259 for targets of $1269 and $1278 with a stop loss placed below $1249. Longer term target $1298. A buy on dips is again advisable for the week with stop losses placed below $1241.
Short trades are unlikely but still gold can be sold below $1248 for targets of $1241 and $1227 with a stop loss placed above $1259. Longer term target $1208.
Gold saw a crack of more than $14 on the back of hawkish commentary by the U.S Fed after it raised interest rates by a quarter of a percentage. Gold was trading higher in the early part of the week, and after the event it started a downward journey which broke through multiple supports but still is above a very critical mark of $1247 which if gives way selling might intensify. The pattern of movement in prices was a copy of what happened in the week before thus a similar weekly candle was formed again and such a candle again shows uncertainty over the movement of prices.
On the chart –
Gold saw buying during the start of the week which resulted in a double top formation and gold skidded towards new lows after a hawkish commentary by U.S Fed over its possible rate hike programme. Thus the fall was a combination of both technical and fundamental aspects. Formation of lower highs and lower lows was clearly visible which might be a dampening factor for prices ahead. The circle denotes the range gold is trading in. With above situations we have 2 scenarios –
1. Gold yet again formed a double top which was followed by the U.S Fed event resulting in a massive technical and fundamental correction from the highs. After such a failed attempt and a fall, gold can slide lower to $1247 (1) which is a massive support and a key to further price action. If such a support gives way, gold can see a further fall towards $1227 (2) which again continues to support the prices though a less popular area compared to $1247.
2. Gold continues to slide on technical grounds over fundamentals which is not a negative for the metal, rather it is a healthy correction. For gold to go up it must first cross $1259 as demonstrated on the circle. If gold manages to cross the mark, it can head higher towards $1269 (A). If this area is crossed successfully prices can move forward to $1278 (B). And if situations favor the prices it can even head higher to $1293 (C) though such a move so quickly from the current prices is unlikely.
Bullish view – Bulls should be happy as gold’s correction is broadly technical over negative fundamentals as according to Fib retracement from highs gold is expected to fall towards 38.2 area which is $1249-$1251 (which is also the low of the circle) from where a possible reversal is very much likely. This action is positive for the bulls and new highs can be expected once the upmove begins. A buy in dips strategy is advised if the prices fall towards the Fib’s 38.2 levels.
Bearish view – Bears were loaded with ammunition as they once again eroded the prices from the highs copying the earlier week’s pattern. Selling intensified once $1269 gave way thus indicating a bearish mood for the gold prices. If such price action continues gold can slide lower to its long time support area of $1227.
On larger terms, Gold still remains neutral with a positive bias. Prices are expected to move on either side but setup favors upside after the technical correction ends and there are no major events which might affect the prices largely on either side thus sideways with upward bias.
Possible trades are on both sides, Gold can be bought above $1259 for the targets of $1269 and $1278 with a stop loss placed below $1247. Longer term target $1293. A buy on dips is advised if the prices fall towards $1249-$1251 as a reversal is likely from there with stops placed below $1241.
Gold can be sold below $1251 for the targets of $1247 and $1227 with a stop loss placed above $1259. Longer term target $1208.
Gold posted negative returns after 4 weeks with a crack of $10 in a volatile week of trade. Start of the week saw gold rising to new highs after which it slammed brakes on gains and reversed from the high point in later half of the week falling so much so that it even eroded gains of earlier week. The candle created is a bearish one on weekly basis but it can be also seen as an technical correction over bearish bias, and such a candle might create a cloud of uncertainty over the movement of prices on either side.
On the chart –
Gold continued its upside to create new highs but was followed by incremental selling which made the prices settle lower broadly on account of the technical formation of double top. Only positive to be taken out from the week is it still managed to create a higher high and a higher low which may signal some bullishness in the metal. The circle denotes the trading range of the metal. With such a price action we have 2 scenarios –
1. Gold created a double top at $1298 which led to a massive technical correction. This also indicates selling/shorting at higher levels. After such a fall and breaking of supports, gold can further correct towards $1261 (A) which is a fairly good support in the weekly chart. If this support area fails to hold gold can slide further to $1244 (B) which again is a support/buying area of the metal. Finally on any adverse situation if this area gives up we might see a next leg of selling towards $1223 (C).
2. Gold’s fall from highs is more technical than fundamental which can be a positive sign as there is no negative news flow which might aid incremental selling from the current levels. In order to continue the uptrend gold must initially cross the very crucial price point of $1273 (1) which had acted as a stiff resistance capping gains on closing basis. If this resistance is crossed we might see a rally to $1280-81 (2) which is key point of interest since its a closing of the earlier week which might act as as a brief barrier to upside. A close above this level might propel the metal higher to $1298 (3) if the situations favor buying in non-risky asset class.
Bullish view – Gold bulls must take heart from the fact that they managed to create new highs and the weekly candle even negative created a higher high and a higher low which has been seen as a positive indicator for the prices. Price action denied bulls to continue the uptrend but a close above $1269 is still considered bullish in a looming bearish atmosphere. If this price point/support holds we might see continuation of the uptrend.
Bearish view – Bears were on full charge as they eroded the prices from the highs of $1298 to a low of $1269 in a span of 3 days, even dismissing the gains accumulated from earlier week. Clearly a bearish momentum was visible as selling pressure gained strength when the prices were falling. If this pressure continues gold is expected to fall further towards supports once again to test the demand of the metal at lower levels.
On larger terms, Gold is in a uncertainty cloud thus neutral as such corrections which are based on technical outlook may or may not last along with a major event of U.S fed rate hike decision to take place in the next week. Prices are expected to be fairly volatile in the coming week.
Possible trades are on both sides, Gold can be sold under $1269 for the targets of $1261 and $1244 with a stop loss placed above $1278. Longer term target $1223.
Similarly gold can be bought above $1273 for the targets of $1281 and $1298 with a stop loss placed below $1261. Longer term target $1308.
Gold posted incremental weekly gains of over $12 which was broadly on account of bad data coming out of America which helped subdue fears over a possible rate hike by the U.S Fed in this month. Week was again a range bound one with the prices traveling between $1259-$1272 until last day when gold broke through the ever crucial $1272 conclusively which helped in adding more gains. Weekly candle formed is yet again showing bullishness in the metal price for the coming week.
On the chart –
Gold was clearly in a bullish momentum as the dips towards $1259 were bought on all occasions with the weekly candle forming higher top and higher bottom which is considered to be a very positive sign for the metal. Gold was expected to break through the $1272 mark and enter into next trading range which it complied to. Circles in the chart denote the ranges gold can trade in, and the break into the 2nd circle indicates range expansion thus indicating more bullishness for the metal. With shapes favoring bullishness we have a scenario for it –
Gold saw the dips towards $1259 bought on every occasion which suggested expansion of the range as in earlier week similar thing happened at $1247 levels. Gold broke through the resistance of $1272 on back of poor U.S data which helped the prices move into the next trading range denoted by the circle on the chart. With gold into the new trading range, prices might rise higher towards $1288 (A) as gaps in the chart will aid the movement to be brisk. If this level is taken out, prices are expected to move further higher to $1298 (B) which might act as a brief resistance since its a behavioral pattern when prices move towards new highs. If this price point is crossed, gold may edge higher towards $1307 (C) which is nearly the top of the trading range/circle and good resistance is expected here.
On a side note, there is a bearish scenario available but its very unlikely. Still a bearish trade can be initiated if prices break $1259 (1) which may lead to further downfall towards $1233 (2), and if this support area gives way the prices might find its feet near $1216 (3) which is lowest point of the circle/trading range and a good support for the metal.
Better than above is to trade the range of $1259-$1273 on a bearish note that is to sell under $1273 for the target of $1259 if a trade on bear side is to be taken at all.
Bullish View – Bulls were in charge as the prices created higher top and higher bottom which is extremely positive. Clearly bets on the bullish side were visible since dips to $1259 were bought thrice which was followed by incremental gains as such pattern suggests with a close way higher above $1272. Another aspect which denotes bullishness is the fact gold closed above the overlapping resistance of $1278 and a clear break into the next trading range. This buying pressure may continue with gold expected to create new highs in the coming week also confirmed by the pattern formation of triple bottom.
On larger terms, Gold remains in bullish bias with prices expected to move higher in the trading range of $1270-$1308.
Possible trades are on the bullish side, Gold can be bought near $1280 for the targets of $1288 and $1298 with a stop loss placed below $1273. Longer term target $1307. If we see a fall in prices it can be bought near $1269-$1273 for the above targets with a stop loss placed below $1259.
Short trades are unlikely, though gold can be sold under $1259 for targets of $1233 and $1216 with a stop loss placed above $1273. Better trading option on the short side is to trade the range of $1259-$1273, that it selling gold under $1273 for the target of $1259 with a stop loss placed above $1280.