Gold slipped over $15 testing the bottom once again which was created last week. Gold’s current scenario is a treacherous one, as technically it seems to have made a bottom which has been tested but a lower close from last week isnt making the bullish picture look stronger. With number of events lined up in the week, its really hard to determine the movement of gold as these can create big moves on either side. All in all gold remains bullish till the low is held, once its broken conclusively bears take the control again.
In the chart –
Gold didnt had a green week as expected rather it created a new low on closing basis but also respected the lows created in the last week suggests confusion in the trend as this low is a very important make or break for the prices moving ahead on a longer term basis. All eyes will be on a stream of fundamental developments due to take place which can create volatile swings in the prices thus there may not be a guarantee that the low will be held in such uncertain situations. We have 2 scenarios –
1. Gold’s respecting of lows again suggest the downside is next to over. If this low is held it can move towards $1243. If this is crossed it can go higher till $1260. And if this is taken out it can surge towards $1276.
2. Shorting gold before the low is taken out conclusively may not be a good idea. Once the low is broken it can resume its slide towards $1210-$1200 where next big support can be found.
In the given situation, both bullish and bearish view exists, the pivot being the low created last week. Bulls will win the battle if the low is held and the prices move higher which is more likely. Alternatively bear’s attack will increase with a lot of ferocity once the low is broken. This week should be the decider for the trend as both technically and fundamentally gold is placed at a very crucial point. Maybe the fundamental events take the center stage in deciding the fate of the gold as technically its experiencing push and pull at higher and lower levels.
On larger terms, Gold is sideways and may take any course preferably a bullish one. For the trend to emerge we need to keep an eye on how gold reacts to protecting the lows.
Possible trades are on both sides, gold can be bought above $1243 for the targets of $1260 and $1276 with a stop loss placed below $1236.
There are no immediate short trades as the low was respected. Trades come alive if this low of $1236 breaks making gold move towards $1200s.