Gold consolidated with minor cuts of $4 after making 3 large candles closing above its previous 52 week high again keeping the overall trend intact. Price saw a u-turn from sub $1540s level again signalling a possible near term bottom/key demand zone as dollar remained weak. With next big fundamental event being on the radar – Impeachment of the U.S President, its highly unlikely the metal will negate the uptrend while fresh highs should definitely loom large keeping the bears in a limbo. Fundamentals look really strong for an upside in metal now whilst technicals still drag along which may lead to more consolidation before a fresh burst on the upside. To watch this week – World Economic Forum in Davos and other important economic data.
On the chart –
Gold had a subdued week after a mega 100 point rally owing to lowered geopolitical tensions/risks and a possible time correction. But the story remains intact with uptrend continuing as the metal had a positive closing again above its previous 52 week high along with fundamentals showing strong support for bulls and technicals pointing in any other direction except south. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1571. If this is crossed it can move towards $1581. And if this is taken out it can rally to $1597.
2. Short trades still doesn’t entice as trend remains bullish except scalp trades.
Possible trades are on both sides but mainly on upside, gold can be bought above $1564 for the targets of $1571 and $1581 with a stop loss placed below $1554. Longer term target $1597.
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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