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Gold suffered its worst week since 2013 making a very big red candle amidst the financial meltdown around the globe where every asset class was sold off heavily. The reason behind this humongous move was the increased fears of pandemic outbreak due to coronavirus which kept spreading at a good pace across the globe. Though this should have acted as a positive catalyst for the prices but gold had a sell off mostly due to extended margin calls or cutting of profitable positions. Fundamentals look most supportive as gold remains the safe haven but again technicals might not work much in such times of all around financial meltdown. To watch next week – U.S election nominations and other important economic data.

On the chart –

Gold had a real ugly week in line with other asset classes as everything saw a brutal sell off due to fears of pandemic outbreak. The huge red candle nearly wiped out the previous week’s gains, had it done so fully it might have signaled otherwise than bullish . We have 2 scenarios –

1. Gold closed above the support, till this is held it can go to $1597. If this is crossed it can move towards $1616. And if this is taken out it can rally to $1630.

2. Short trades remain ready but are on sidelines as the support hasnt yet broken except scalp trades.

Bullish view – Bulls were rattled as they suffered the worst week since 2013 where the metal fell more than $120 creating a big panic in the bullish community. But everything is not against as bulls managed to hold on to the key support area and did not allow to fully reverse gains added in last week which was a breakout. Fundamentals came back to rescue bulls when technicals went haywire which remains the present scenario as well unless sanity comes back in financial markets. For bulls to remain in the driving seat they need to protect the supports while aiming for fresh highs.

Bearish bets are still not much active as the trend remains bullish but last week’s movements might help them to foray in soon if things continue to worsen.

On larger terms, Gold remains bullish and prices are expected to head higher.

Possible trades are on both sides but mainly on upside, gold can be bought above $1587 for the targets of $1597 and $1616 with a stop loss placed below $1576. Longer term target $1630.

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