On the chart –
Gold erased all the gains of the previous week ending from where it had started. This U-turn from $1300 was account of a stronger dollar index and now less impacting Korean peninsula news flow. Gold is split between bulls and bears but has a slightly negative approach when it comes to prices. We have 2 scenarios –
1. Gold took support at $1279-$1281 area, and if this is held gold can move higher which is uncertain since there is nothing fundamental to support the rise in prices. If the support is held, gold can rise to $1291. If this is crossed it can head higher to the very crucial area of $1297 which is a decider for further price action. And if this is taken out, prices can head north to $1317.
2. Gold lost the $1300 mark with ease which certainly sounds . If the current trend prevails gold can fall to $1271 where gold may find some support. If this support is broken it can head back lower to $1261 where it had bottomed out. There is a chance gold might see further slide if $1261 is breached.
view – Only thing giving support to bulls is the price took support at $1279-$1281 area and rebounded from lows. Bullishness was erased by incremental fall in prices on daily basis. The way out for bulls is they need to hold this support to keep the green in gold prices. Gold will remain sideways unless a path is chosen.
view – Bears returned to the party with a flair as they kept eroding the prices from $1300 to the lows of $1280. Such price action definitely suggests confusion where one week is up and other down. Bears successfully broke through multiple supports signaling lack of buying and a change in trend. With such movement, prices may fall further to retest the bottom it created 2 weeks before.
On larger terms, Gold remains sideways with a negative bias. Prices are expected to be range bound unless a direction is decided.
Possible trades are on both sides, Gold can be bought above $1284 for the targets of $1291 and $1297 with a stop loss placed below $1271. Longer term target $1317.
Gold can be sold under $1279 for the targets of $1271 and $1261 with a stop loss placed above $1291.