Overview:- Yellow metal is gaining it’s shine once again and arrived at 2013 high, and becoming the leaders of all the bullion segment, as yellow metal is making successively higher highs and higher lows on weekly basis and it resumed the rally from the $1477 level and now arrived at $1660 level at the time of writing. Well in the early morning session it already marked the high of $1680 level which is witness of bull’s presence. Bulls are getting wild and they are heading north side. We are continuously writing to buy the gold from $1570 level and now gold arrived at $1680 which is more than $100 move in just a week.
The short term to intermediate term trend is up and in an uptrend market always buy on dips will be profitable strategy. Well today also we are waiting to buy the pair on dips around $1640 level.
Yesterday finally gold given a massive rally during the US session where it was already expected from the bulls, as we have mentioned in our previous report last week to go for buy around 1574-75 for target of $1590 and $1600 level with strict stop loss of $1560 level, every dip should be convert as buying opportunity. Our both targets have been achieved so we are expecting that our readers must have made profit from this move which is providing us bullish signal.
Fundamental Analysis:- The respiratory disease continues spreading and is taking its toll. Chinese President Xi Jinping has sounded the alarm over the outbreak at the Communist Party’s gathering. His words contrast the upbeat mood of last week. Areas in northern Italy’s industrial heartland have been put under lockdown due to a significant cluster of cases. The Venice Carnaval has been canceled. In South Korea, the number of cases related to a religious sect in the south of the country is growing.
The Dollar Index has also shown a strong reversal candlestick on the daily chart which is known as bearish marabuzo candlestick. Well the current price structure is pushing us to have a bearish move in the dollar index however we will get further bearish confirmation below the 99.10 level.
Technical Analysis: – Today from the morning session itself gold is heading upside and seems like bullish rain is going on and it is already 1.14% up which is bullish sign itself. From technical prospective we can see that gold is trading and moving between the uptrend channel which indicates that a perfect balanced demand and supply is going on where bulls are leading and playing at upfront.
All in all, the metal looks set to test the 2012-13 high of $1700 level. Overall gold is trading above all the major and minor EMA lines, which is providing us bullish signal, however we will get further bullish signal above $1680 level.
Odds are in favor of bulls and daily to weekly bias remains bullish on gold as long as $1625 level remains intact. A bullish crossover on the MACD indicator is a recent development and RSI is turned upside above 70 level, so we may see some correction but this correction should be taken as buying opportunity.
The bulls are dominating the bears and leading in the game. Bulls are playing at front foot and it seems like bulls are going to continue with this game and will not provide any chance to bears. On contrary a daily closing below $1580 level will change the outlook from bullish to bearish.
What next:- Yellow metal is trading and sustaining above minor and major EMA lines which is providing strength to the bulls. The $1620 level can be considered as key support level followed by $1600 where $1680 is a key resistance level followed by $1700 level.
Trade idea:- Based on the chart and study above we would suggest that traders may go for buy around 1640-38 for target of $1680 and $1700 level with strict stop loss of $1620 level, every dip should be convert as buying opportunity. Wait for the entry as current price is $1660.
