Gold’s weekly outlook: April 08-12

TVC:GOLD   CFDs on Gold (US$ / OZ)
Gold had a muted week in terms of actual gain/loss as it was in consolidation after suffering a big red weekly bar in the previous week. The yellow metal moved in $25 range testing the support and the resistance ending with cuts of mere $1. Some notable events are lined up in the week ahead with “FOMC Meeting Minutes” being the most important one which can move the prices in either direction but the trend remains bearish as the breakdown was respected and the price closed fairly below that level.

On the chart –

Gold after suffering the breakdown continued its downtrend creating lower highs and lower lows formation. The red trendline was respected suggesting the upside may now remain capped and rallies are getting sold into. With global risk-on trade having a fresh life its difficult for gold to hang on at high levels unless trend changes again. On the chart –

1. Bulls remain on sidelines as the breakdown was tested and respected excepting scalp trading.

2. Gold closed below the support line, till this is held it can move towards $1284. Once this is crossed it can slide to $1273. And if this is broken it can fall further to $1260.

Bullish bets remain out of contention until gold resumes the uptrend by giving a positive breakout from the flag.

Bearish view – Bears continued the assault as they eroded the prices further creating a new weekly low along with nibbling away the gains by $1. Bears were active throughout the week as the prices were pegged back from highs every time adding more strength to the trend. Fundamentals seem to be working in favor of bears and till the support of the breakdown line is held prices can fall further towards the next major support area of $1236-$1240.

On larger terms, Gold continues to remain bearish and prices are expected to head lower.

Possible trades are on both sides, gold can be bought once it breaks out of the flag or at the bottom of the flag/channel.
Gold can be sold under $1289 for the targets of $1284 and $1273 with a stop loss placed above $1298. Longer term target $1260.
A sell-on-rallies can be useful under current scenario.


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