Overview:- Gold price closed last week at $1510 which was a 8 week’s fresh high. Well after a strict narrow range we have seen a bullish breakout last week with a positive candlestick which looks like bullish marabuzo candlestick on weekly chart. The valid breakout of flag pattern is indicating that rally has been resumed once again and history tends to repeat itself so once again we are in the last week of the year 2019 and every year gold bounce from here for further 2-3 months at least so we would suggest our readers that go for long at present levels and accumulate it to enjoy the upcoming rally.
Fundamental Analysis:- Cautious optimism surrounding the phase-one deal got another puzzle to solve during the weekend, which came from the South China Morning Post (SCMP). The Chinese media conveyed Beijing’s readiness to follow the promises on the condition that the US behaves seriously. The tone of the article, as usual, sounds like the warning to Washington despite the US President Donald Trump’s cheering up for the nearness to the signing.
On the other hand, the yellow metal should have benefited from Bloomberg’s communication of the US “counter strikes” targeting Iraqi and Syrian spots two-days after its civilian contractor’s killing by the rocket attack on an Iraqi military base.
Technical Analysis: – From technical prospective we can see that a bullish flag pattern has been posted on the weekly chart and a bullish breakout of the mentioned price pattern has been occurred which has open the way towards the $1550 and $1580 level once again and furthermore. Short term to intermediate term trend is up so in an uptrend market buy on dips will be profitable strategy and the way bulls are reacting it seems like we got the perfect dip and the current levels are not going to repeat again and we should catch these levels to accumulate the gold.
Three consecutive bullish marabuzo candlesticks i.e. known as three white soldier price patterns has been posted on the daily chart which is providing strength to the current buying. A bullish marabuzo pattern candlestick has been posted on the daily chart which is very rare and we got the reaction of it also. Well bulls are trading and sustaining above the moving average lines and providing us bullish signal. The $1560 level is about to test in the coming weeks. On the international chart gold is trading and sustaining above the $1500 level which is a psychological level and generating bullish signal, the $1560 level is the next target for bulls. A short term rounding bottom pattern is in process of formation which will complete when bulls will arrive at $1560 level.
Odds are in favor of bulls and daily to weekly bias remains bullish on gold as long as $1470 level remains intact. A bullish crossover on the MACD indicator is a recent development and RSI is turned upside above 50 level.
What next:- The bulls are dominating the bears and leading in the game and playing at front foot and it seems like bulls are going to continue with this game and will not provide any chance to bears. We need a daily closing above $1520 level, overall the current picture is bullish picture.
On contrary a daily closing below $1470 level will change the outlook from bullish to bearish. Yellow metal is trading and sustaining above minor and major EMA lines which is providing strength to the bulls. The $1490 level can be considered as key support level followed by $1470 where $1545 is a key resistance level followed by $1560 level.
Trade idea:- Based on the chart and study above we would suggest that traders may go for buy at current levels $1512-10 for target of $1545 and $1560 level with strict stop loss of $1470 level, every dip should be convert as buying opportunity.
