On the chart –
Gold had a wild week testing both supports and resistances but managed to latch on to gains and eventually closed above the key level of $1331 which is positive for the metal going ahead. Fundamental developments will aid the prices in either direction but its expected to be on the positive side. We have 2 scenarios –
1. Gold’s closing above $1331 suggests upside momentum could continue. If this support is held then it can move higher to $1345. If this is crossed it can rise towards $1358. If this big is taken out then it can create a fresh 52 week high of $1374.
2. Short trades remain muted in the given scene but if $1331 breaks it can slide to its support at $1317. And if this fails to hold it can fall towards $1308.
view – Bulls were back after a big red week but they failed to capitalize on the gains created in the early half of the week, still they won the week as they managed to close above the crucial $1331 mark which suggests more upside ahead after receiving a battering from highs in the later half of the week. From past few weeks gold is able to hang on to its 20 day moving average which is very positive for the bulls to keep the momentum going on the upside even if they fail in the week to manage gains. Such a move certainly indicates the breath is largely positive and new highs are on the cards.
There is no bearishness unless the supports get broken.
On the larger terms, Gold still remains sideways but now has a bias. Metal is yet again confined in a range and a break of such will determine the outcome of the brawl going on from past few weeks, and chances of a break on upside is largely high.
Possible trades are on both sides, gold can be bought above $1337 for the targets of $1345 and $1358 with a stop loss placed below $1331. Longer term target $1374.
There are no short trades unless $1331 breaks, and if it does still its limited to $1317.