Gold swung nearly $25 in the week testing its support and resistance as it continued to trade in the defined range of $1185-$1215 before closing with gains of $12 for the week. Gold -0.54% closed above $1200 after a month even on account of a higher dollar index 0.04% which suggests there might be more gains to come once the range gets broken on the upside. Another bullish week went by giving fresh lead to the bulls.
Gold -0.54% remained in its range but gave a positive signal by closing above the crucial $1200. Though it was again a directionless week but plenty to take away from it as it formed a higher high and a higher low formation giving a deeper edge to the bulls apart from the significantly stronger closing. We have 2 scenarios –
1. Gold’s closing above $1200 speaks plenty itself. If it manages to defend the support it can head towards $1208. If this is taken out it can move to $1217. Once this is conquered it can rally till $1228.
2. There are no short trades in the offing as the support was respected. They come online once $1185 breaks for targets of $1162 and $1123.
Bullish view – Bull’s show of strength was quite visible as the closing was above $1200 since the support was defended perfectly. Gold -0.54% is trying to gain momentum on the bullish side steadily but can only be confirmed once it breaks out of the range. Stronger moves are expected once $1215 is taken out as it been a hurdle for past many weeks.
Bearishness fails to lure as the the support was held. They become attractive once $1185 breaks.
On larger terms, Gold -0.54% still remains sideways but with a mild bullish bias. Prices remain stuck in the range and a break on either side will decide the direction.
Possible trades are on both sides, gold -0.54% can be bought above $1208 for the targets of $1217 and $1228 with a stop loss placed below $1195. Longer term target $1243.
Short trades go live once $1185 breaches, if it does then it can be sold for the targets of $1162 and $1123.
Reference: Trading View
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