Gold’s poor run continued this time breaking the crucial $1200 mark that too on closing basis. The metal saw a big weekly cut of $50 testing support as deep as $1160s before settling considerably higher retracing about 50% of the losses from lows. Such a pullback raises eyebrows over the continuation of the current fall as this move looks to stem it and maybe a trend reversal might be on the cards with a falling dollar aiding it. Gold 0.03% has seen a cut of $150 in a span of ten weeks which is quite sharp and a pullback or retrace should be around the corner as its deep into oversold category.
On the chart –
Gold 0.03% continued its downward journey suffering the worst in 52 weeks as it tumbled over $50 intra-week but there were many positives to take away in such a horrible week which saw brisk moves on either sides. Its recovery from the lows was the biggest takeaway which points to a shift/change in the trend if the support holds. We have 2 scenarios –
1. Gold 0.03% comes into the buyer’s radar after many weeks as buying was visible at lower levels and the price bounced back strongly from the lows. Above $1185 gold 0.03% can continue its uptrend towards $1198 where it should find good resistance. Once this is taken out it can shoot till $1208. If this is surpassed it can move towards its next resistance at $1217.
2. Gold 0.03% is in a bear territory as supports got broken and prices dipped very fast. If $1185 fails to sustain then it can fall back towards $1162. Once this is taken out it can set sights at next support at $1123. Though such a move on immediate basis is looking unlikely given the movement of the metal in the week.
Bullish view – Bulls had much to rejoice after 9 weeks of pain as they held the support at $1160s and the price retraced quite firmly going above the resistance on closing basis. Such a candle oozes lots of positivity which was lost weeks before. Bulls have the momentum in their favor but are against the trend. For bulls to gain supremacy $1200 needs to be reconquered which is looking likely or atleast a retest of such is is definitely on the cards.
Bearish view – Bears continued to stamp their paws as gold 0.03% posted negative returns. Important levels were taken out which failed to give any resistance on the downside. For bears to keep their trend intact they need to keep the prices under $1185.
On larger terms, Gold 0.03% has turned sideways and prices expected to move in either direction as the metal is at crucial point.
Possible trades are on both sides, gold 0.03% can be bought above $1185 for the targets of $1198 and $1208 with a stop loss placed below $1180. Longer term target $1217.
Gold 0.03% can be sold under $1180 for targets of $1162 and $1123 with stop loss placed above $1185 though this seems less likely when compared against buying.
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