Gold broke out from the 3 week consolidation registering new high of $1452 as it rallied $52 from the lows ending the week with gains of $10 which again is a fresh closing high on weekly timeframe . Geopolitical tensions added fuel to the rally which is already backed by a certain rate cut by Fed in July. The closing yet again proves to be super bullish as it managed to cross the red trendline which it was facing resistance from last few weeks.
On the chart –
Gold resumed its rally as it climbed above $1450 in a large range week creating higher highs and higher lows formation which itself is a bullish sign. Another breakout on the upside keeps the trend extremely bullish while fundamentals continue to support high prices as growth fears remain along with an over valued dollar. We have 2 scenarios –
1. Gold closed above the support, till this is held it can move to $1434. If this is crossed it can rally till $1448. And if this is taken out it can climb till $1464.
Short trades remain unproductive given the trend except scalp trades.
Bullish view – Bulls roared ahead as they conquered $1450 after 3 weeks of consolidation but failed to latch on to it. Nonetheless it was resumption of the rally as the metal gained $10 and registered a new closing high (weekly) along with higher high and higher low formation which supported the breakout. With geopolitical tensions getting heightened and slowdown fears lingering gold is fundamentally supported to reach new highs till the supports are held.
Bearishness does not fits in the equation.
On larger terms, Gold continues to remain bullish and prices are expected to head higher.
Possible trades are on both sides but mainly on upside, gold can be bought above $1428 for the targets of $1434 and $1448 with a stop loss placed below $1416. Longer term target $1464.
Dips towards support (and breakout region) can be used to create longs for the above mentioned targets.
Shorts can be useful for scalp trades only.
Reference: Trading View
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