Gold reclaimed $1300 after eight months in an expansive week breaking out of the triangle which it had got stuck in the current month. The week was first big green candle of 2019 where gold posted gains of $22on the back of a falling dollar setting the momentum back for the bulls. A closing above $1300 itself is a very bullish scenario keeping aside the fundamentals which is ticking the boxes for a higher gold and a lower dollar price action mainly attributed to rising demand for safe haven and a looming recession viewpoint given the global fundamentals which is pointing towards a slowdown.
On the chart –
Gold had a nice big weekly green bar which points towards yet another breakout from a consolidating triangle/range. This time its comparatively smaller to the ones happened in weeks before but nonetheless it is music to the ears for the bulls. The momentum is back with the bulls with the trend getting deeper. We have 2 scenarios –
1. Gold closed above the important $1300 mark, till the support is held it can move till $1308. If this is crossed it can rally till $1318. Once this is taken out it can cruise towards $1327.
2. Short trades once again seem to have lost the shine as gold broke out on the upside. Though they can be helpful if gold is unable to get beyond $1308.
Bullish view – Bulls finally overpowered the bears this time and conquered the psychological $1300 with a show of force of a massive $22 daily bar. Bullish bets were aided by a weaker dollar along with supportive fundamentals of higher gold prices. The long term trendline was held and the prices cannoned from there which was widely anticipated given the global setup. For bulls more gains lie ahead till the supports are held and higher highs continue to be achieved.
Bearish view – Bears were rocked by the move in the price as they failed to contain gold below $1300. Every passing week is fading short trades as breakouts are happening on the bullish side. For bears, only hope remains that $1308 may act as a hurdle as its a key area on the chart but they have lost momentum again.
On larger terms, Gold remains in the grip of bulls with prices expected to move higher.
Possible trades are on both sides, gold can be bought above $1308 for the targets of $1318 and $1327 with a stop loss placed below $1296.
Short trades goes against the trend but can be viable only if $1308 becomes a wall going ahead.
Reference: Trading View
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