Gold withstood another volatile week where the prices see-sawed over $20 but the crucial $1300 mark was respected again showing great strength at lower levels. In such a wild week gold managed to add on to minor gains of just over $2 which is quite respectable given the fundamentals which are doing rounds around the globe. Gold pulled back into its trading range as depicted by trend-lines again on closing basis suggesting that the bullish trend remains intact.
On the chart –
Gold’s closing above the support level again oozes bullish sentiment which can further take the prices back above the decisive mark of $1331 and higher. Fundamentally gold has lots to take direction from and possibly the way is on the upside as the lows have been tested over 3 times and prices have bounced back strongly. We have 2 scenarios –
1. Gold’s closing above $1317 suggests more upside ahead, if this is held it can go till $1331. If this trend deciding point is crossed it can rally till $1345. If this crossed it can move higher to the resistance zone at $1362.
2. There are no short trades emerging as the support was held. If $1317 breaks still the fall is limited to $1308.
Bullish view – Bulls again emerged on the top regardless of hammering they took in the first half of the week as they managed to get a higher closing and that too above the support of $1317. Once again the $1300 mark was defended which should muster enough motivation for the bulls to lead the way as both technically and fundamentally they are supported quite firmly. If the support levels are held we should see the prices back above $1345 mark sooner as the fall from highs was steep so similarly the rise can match that magnitude.
There are no bearish views as the support was held.
On the larger terms, Gold still remains rangebound struck in its trading range of $1300-$1370. Need a breakout on either side to get a clear signal of the trend.
Possible trades are on both sides, gold can be bought above $1324 for the targets of $1331 and $1345 with a stop loss placed below $1317. Longer term target $1362.
There are no short trades unless $1317 breaks, and if it does still its limited to $1308.