Gold: Analysis

Bravetotrade Mod Updated   
MCX:GOLD1!   Gold Futures
✔Gold was holding 50200 since mid of May. It held this level at three occasions (see chart) but finally broke it in the mid of September.

✔So, a lot of traders who bought at 50200 support, with stop loss underneath this level, were shaken out in this breakdown. Most would have reversed their positions to short. Gold revisited 50200 in a retest attempt and this normally attracts pullback traders to go short. So many short positions are supposedly added till the end of September, with stop loss just above 50200.

✔But as Gold managed to sustain above 50200 again, most stop loss orders got triggered leading to short covering. Everyone who was shorting below this level, had to buy in order to close their positions. Also fresh buyers would look to catch this opportunity. This huge flux of buy orders lead to a sharp rally.

✔Presently it is near 52000 round number which has acted as an important level in the past too. Also there is trendline resistance, joining April and August highs at around 52100.

✔So two things can happen around above resistance levels. Either buyers would absorb supply at resistance and push Gold to next resistance 52750-52800 in the short term or profit taking/sellers would push it back to 51000 or 50200. Only further price action would throw more light upon this.

Thanks for reading.
Do not forget to like for more such ideas in future.
Hard reaction from resistance. Possible support near 50500 and then 50200
Gold Update

JJ Singh
Moderator, TradingView

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