On the chart –
Gold continued to build on the last week’s ultra reversal candle as it added $10 for the week which saw a higher high as well. The close seems to provide another signal for prolonged bullishness as it broke the consolidation in lower timeframes which was successfully retested as well. In an expressive picture, it looks like a in formation which if broken would just pile up the cases as the major reversal signal of the formation got confirmed few days ago with only one large breakout remaining – the flag/consolidation going on since weeks. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1755. If this is crossed it can move towards $1771. And if this is taken out it can rally to $1789.
view – Bulls had a successful outing as they created a higher high though unable to close at such highs still it remains a cause of celebration since another consolidation breakout has been achieved which affirms bullishness. For bulls, the technicals have come into full support which was missing sometime back while the fundamentals continue to demand higher prices since the pandemic is still at large with its 2nd wave getting uglier and deadlier even after lot of vaccination drives across the globe as the virus continues to mutate forcing countries to adopt lockdowns (even if partial) again as medical facilities remain at overwhelmed state. In simpler terms gold again got a new set of wings to fly.
On larger terms, gold remains and prices are expected to head higher.
Possible trades are on both sides but mainly on upside, gold can be bought above $1746 for the targets of $1755 and $1771 with a stop loss placed below $1737. Longer term target $1789.
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.