Gold’s weekly outlook: June 03-07
Updated
Gold finally made a decisive move as it broke out from the flag on the upside changing the trend to bullish after more than 2 months. The consolidation which it was in from past few weeks ended with a massive move of $21 happening on the upside with gold ending well above the psychological $1300 mark. The week was a huge one with the candle having a range of more than $30 testing both the support and the resistance indicating that gold had a price-volume breakout. Technically, gold continues its cup and handle pattern which now is on the handle formation part on the upside on lieu of the breakout and the low having been registered maybe for the year on the whole.
On the chart –
Gold has turned bullish after it broke out from the flag which it was moving in from last 12 weeks. Fundamentally, it wont be any better time for the gold to move higher as global growth story is keeping the economies under severe pressure with the reliance on safe haven demand of gold increasing as dollar too is falling in tandem with risky asset class due to the slowdown. Only thing which may hinder or slowdown the bullish activity is the long term trend line which is still being resistant. We have 2 scenarios –
1. Bulls make a comeback as gold broke out from the flag on the upside and also closed above the $1300 mark. Till the support is held it can head higher to $1308. If this is crossed it can move to $1318. Once this is taken out it can rally to $1327.
2. For bears, the run is over as the price handed a breakout on the upside.
Bullish view – Bulls come roaring back as not only the price had a breakout on upside it also closed above $1300 after 9 weeks. Nearly every fundamental is supporting the bulls as the demand for the yellow metal has surged given the global outlook. The continuing cup and handle pattern gives a lot of impetus to the bulls as price is all set to go higher given the setup. The second leg of the rally looks to have started which had begun in mid August of 2018. With all the euphoria amidst the bulls the price can make a new high given the breakout holds.
Bears failed to prevent the breakout which wipes out all the remaining bearishness.
On larger terms, Gold has turned bullish and prices are expected to head higher.
Possible trades are on both sides but mainly on upside, gold can be bought above $1308 for the targets of $1318 and $1327 with a stop loss placed below $1296. Longer term target $1341.
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.
On the chart –
Gold has turned bullish after it broke out from the flag which it was moving in from last 12 weeks. Fundamentally, it wont be any better time for the gold to move higher as global growth story is keeping the economies under severe pressure with the reliance on safe haven demand of gold increasing as dollar too is falling in tandem with risky asset class due to the slowdown. Only thing which may hinder or slowdown the bullish activity is the long term trend line which is still being resistant. We have 2 scenarios –
1. Bulls make a comeback as gold broke out from the flag on the upside and also closed above the $1300 mark. Till the support is held it can head higher to $1308. If this is crossed it can move to $1318. Once this is taken out it can rally to $1327.
2. For bears, the run is over as the price handed a breakout on the upside.
Bullish view – Bulls come roaring back as not only the price had a breakout on upside it also closed above $1300 after 9 weeks. Nearly every fundamental is supporting the bulls as the demand for the yellow metal has surged given the global outlook. The continuing cup and handle pattern gives a lot of impetus to the bulls as price is all set to go higher given the setup. The second leg of the rally looks to have started which had begun in mid August of 2018. With all the euphoria amidst the bulls the price can make a new high given the breakout holds.
Bears failed to prevent the breakout which wipes out all the remaining bearishness.
On larger terms, Gold has turned bullish and prices are expected to head higher.
Possible trades are on both sides but mainly on upside, gold can be bought above $1308 for the targets of $1318 and $1327 with a stop loss placed below $1296. Longer term target $1341.
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.
Trade active
Trade ActiveNote
First long target met at $1318Note
Second long target met at $1327Note
Third long target met at $1341Note
Next bull target $1356Trade closed: target reached
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