Gold’s weekly outlook: Aug 21-25

Gold closed flattish with a minor negative return after withstanding a week full of volatility. Gold plummeted nearly $24 in the early half of the week then recovered fully to hit fresh 9 month highs above the psychological $1300 barrier but failed to sustain as selling pressure pushed it back towards the support during the close. Gold was subject to the resistance of the $1300 mark and again failed to break the triple top on closing basis but it seems the downside is now limited as there is lot of news flow from America fueling gold prices.

On the chart –

Gold closed sideways with mild negative returns after having volatile moves on each side. Metal found resistance at $1300 which was on expected lines. Pivot point for gold has now changed to $1282 which if violated can see more downside. Gold is in an uptrending channel as lows were rejected suggesting limited downside and a good potential on the upside. There are 2 scenarios –

1. Gold having rejected the lows and creating a fresh 9 month high suggests the metal can have more upside. In an uptrending channel, gold can move higher to $1297 which is the major resistance of the triple top pattern. If this resistance is crossed gold can further climb higher to $1309. If this area is crossed gold can rally till $1319. Trend can only reverse if gold breaks the channel support at $1271.

2. Key levels such as $1300 do not get crossed with an ease, gold retreated after conquering $1300 which clearly suggests selling at high levels. There are no short trades unless gold breaks below $1282 which is a pivot point but again downside is limited to channel support at $1271 if $1282 gives way. Once the support at $1271 is broken gold can slide till $1261. If this area fails to hold gold can further move down towards $1254.

Bullish view – Bulls were on the charge once the price took support and then surged over $30 from the lows. This strong upward movement even took out the psychological barrier of $1300 which is a positive sign for the bulls. Prices are on the rising channel and it is expected to head higher as fundamentals keep on supporting the metal. Prices are expected to once again test $1300 and even higher until gold remains in the channel.

There are no short trades unless $1282 is broken, though main trades on the short side start only once the channel support at $1271 is broken.

On larger terms, Gold has turned bullish from neutral. Prices are expected to head higher and create fresh new highs.

Possible trades are on both sides but largely on long side, Gold can be bought above $1291 for the targets of $1297 and $1309 with a stop loss placed below $1282. Longer term target $1319.
Gold can be sold below $1282 for the targets of $1271 and $1261 with a stop loss placed above $1291. Longer term target $1254.

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Gold’s weekly outlook: Aug 14-18

Gold soared $30 amidst geopolitical tensions after a week of consolidation as the dollar index remained near the lows. Gold completed the pattern of Triple Top when it hit the high of $1297 from where it retreated which was on expected lines. Gold can now head higher only if its able to cross the triple top pattern on a conclusive basis. With the pattern completed it is expected that gold might decline towards sub $1270 levels, also the geopolitical tensions looks to calm down after a week of aggressive comments.

On the chart –

Gold made a brisk move towards its highs of $1297 where it saw selling pressure overtake the demand as seen in earlier weeks. Gold also completed its move towards Fib’s 100% mark which suggests upside is over. Now $1297 acts as a pivot point for further price action, a move above may allow more upside while a resistance will lead to a correction in the prices. There are 2 scenarios –

1. Gold broke above the downward trendline with a huge margin indicating positiveness and further upside might be on the cards once $1297 or the triple top pattern is taken down. With such moves anticipated gold can head higher to $1309 (1) where the metal may find some resistance as seen on longer time frame. Once it crosses this mark it can head even higher to $1321 (2).

2. Gold completed its technical move on the upside which suggests a correction might be on the cards. The price was unable to close above the upward trendline which suggests gold can move lower to $1291 (A). Once gold breaks this mark it can slide to $1278 (B) which is a good support. If this support level is taken out gold can further move down towards $1267 (C).

Bullish view – Bulls came back with fury after a week of minor consolidation which led the prices to its highs of $1297. Price broke through the downward trendline which suggests further bullishness. Such bullishness is only possible if $1297 is taken out on a conclusive basis. Prices are expected to move towards $1321 once the triple top pattern is broken on the upside. There is very less chance of bullish moves as such technical patterns are strong reversal signals and trades on the long side should be taken with extreme caution.

Bearish view – Bears were stunned by the brisk upmove but came back to life when they did not allow the price to go higher above the $1297 respecting the Triple Top pattern. This resistance did not allow the price to go above the upward trendline which suggests selling at highs. Prices are expected to correct after a 5 week rally from the lows.

On larger terms, Gold looks neutral with a negative bias. Prices are expected to correct though it can remain sideways unless a direction is created on a conclusive basis.

Possible trades are on both sides, Gold can be bought above $1301 for the targets of $1309 and $1321 with a stop loss placed below $1291. Longer term target $1346.
Gold can be sold below $1291 for the targets of $1278 and $1267 with a stop loss placed above $1301. Longer term target $1261.

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Gold’s weekly outlook: Aug 07-11

Gold broke the winning streak as it settled lower by $9 on account of better than expected data from America which fueled up the dollar index from its lows. Gold marginally closed lower from the crucial bullish support of $1261 but even such a minor hiccup might cause the metal to gain plenty of reasons for a corrective move. Though no big moves are expected but with this sort of close gold might end up having a sideways to negative coming days/weeks until its back above the $1261 mark.

On the chart –

Gold fell after completing its pattern which was widely expected, the fall extended below the Fib’s 61.8% mark which is seen negative for the metal. Gold has a crucial pivot point at $1251 also confirmed by the bullish-bearish trendlines (black lines) which must hold for keeping the bulls in the game, if violated gold can see an extended fall. With such crucial points coming back into action there are 2 scenarios –

1. Gold lost its luster after 3 consecutive weeks of rise which again is on technical grounds. For gold to continue its uptrend it must trade above $1261, and if this happens gold can move higher to $1271. And if this point of resistance is taken out gold can head north to $1281 where again the metal should find some selling pressure. If this zone is crossed gold can move to its highs of $1297 where it will form a triple top which is a good technical resistance/reversal indicator.

2. Gold fell on technical grounds after completing the pattern. This completion might result into a correction which can move gold lower if it breaks the $1251 mark. If this mark is broken it can move lower to $1241 which is a fairly good support. Now if this support is taken out gold can slide to $1227. And if this area is violated gold can see further selling towards $1217 which is a good support.

Bullish view – Bulls lost their winning ways as prices slid below the bullish support support of $1261. Bulls are not out of the game as prices are still trading in the upper part of the Bollinger band. Prices are expected to bounce back if $1251 is held which looks likely given the importance of the point and the technicals.

Bearish view – Bears regained the power as the prices had a cut of $9 also sliding below the Fib’s 61.8% mark which seems negative. Bears can add on the ammunition once $1251 is taken out and the price moves are totally in favor of them after that. If $1251 is broken prices are expected to continue its slide towards $1241.

On larger terms, Gold looks sideways with mild negative bias. Prices are expected to be sideways unless a direction is created on a conclusive basis.

Possible trades are on both sides, Gold can be bought above $1261 for the targets of $1271 and $1281 with a stop loss placed below $1251. Longer term target $1297.
Gold can be sold below $1251 for the targets of $1241 and $1227 with a stop loss placed above $1261. Longer term target $1217.

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