Gold had a suspenseful week where it broke through the long term trendline on the first day but eventually managed to close above it on the last day of the trading week thus keeping the trend intact as the support was once again respected. Gold had fallen a quick $12 before settling $5 higher for the week. Given the price action, it clearly suggests there is lot of buying interest at lower levels and the weekly support line still acts as a strong support keeping the bullish trend intact.
On the chart –
Gold again tested the support of the long term trendline on weekly time frame and bounced back well above indicating buying at lower levels as well as showcasing the tenacity of the support. With global uncertainties resurfacing along with recession fears gold ought to be in high demand. We have 2 scenarios –
1. Gold closed above the support, if this support is held it can move till $1308. Once this is crossed it can rally till $1318. If this is taken out it can rise till $1327.
2. Short trades still remain out of consideration as the support was held but it will come into play once support breaks for $1284 and $1273.
Bullish view – Bulls not only won the week on the last day but managed to keep the trend intact by holding the weekly support line with gains of $5. The price movement did scare the bulls by giving a wake up call but it all ended as expected. Fundamentals continue to favor bulls and till the support is held price should see a forward action.
Bearish view – Bears had a failed attempt to break the support but did scare the bulls as the prices dragged down quite rapidly after the breakdown. For bears to remain visible they need to break the weekly support line.
On larger terms, Gold continues to remain bullish and prices are expected to head higher.
Possible trades are on both sides, gold can be bought above $1300 for the targets of $1308 and $1318 with a stop loss placed below $1290. Longer term target $1327.
Short trades come into the picture once the support gets broken for targets of $1284 and $1273.
Reference: Trading View
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