On the chart –
Gold’s upward momentum gathered steam once it tested support at $1308. It was a fifth consecutive weekly gain for the yellow metal and also registered a gain of $100 from the lows. Clearly, gold looks to keep on mounting gains as risk of equity meltdown is increasing every passing day. Now the key support for continued uptrend can be shifted from $1308 to $1317. We have 2 scenarios –
1. Gold’s movement suggests the demand is increasing even at higher levels which was not case when it had earlier registered the 52 weak high. If this momentum is continued, gold can head higher to $1345. If this is crossed it can rise to its 52 week highs of $1358. If this resistance is crossed then it can climb higher to $1374.
2. There are no short trades unless the trend is changed and supports are broken.
view – Bulls overpowered the bears when they tried to lower the price below the support of $1308 and took to prices to 4 month highs from there. Bulls were again on top of their game as they added to 5th straight weekly gains and this momentum seems to continue as technically and fundamentally gold demand and prices are looking to head higher. The chart suggests a rounding bottom/cup formation which should take the prices higher. This momentum is expected to continue and the prices should head higher towards $1350-$1360 area.
There is no perspective until supports are broken.
On larger terms, Gold remains in a strong uptrend with the prices expected to head higher.
Possible trades are on both sides but largely on long side, gold can be bought above $1341 for the targets of $1345 and $1358 with a stop loss placed below $1317. Longer term target $1374.
There are no short trades unless $1317 breaks, and if it does still its limited to $1308.