On the chart –
Gold made a brisk move towards its highs of $1297 where it saw selling pressure overtake the demand as seen in earlier weeks. Gold also completed its move towards Fib’s 100% mark which suggests upside is over. Now $1297 acts as a for further price action, a move above may allow more upside while a resistance will lead to a correction in the prices. There are 2 scenarios –
1. Gold broke above the downward with a huge margin indicating positiveness and further upside might be on the cards once $1297 or the triple top pattern is taken down. With such moves anticipated gold can head higher to $1309 (1) where the metal may find some resistance as seen on longer time frame. Once it crosses this mark it can head even higher to $1321 (2).
2. Gold completed its technical move on the upside which suggests a correction might be on the cards. The price was unable to close above the upward which suggests gold can move lower to $1291 (A). Once gold breaks this mark it can slide to $1278 (B) which is a good support. If this is taken out gold can further move down towards $1267 (C).
view – Bulls came back with fury after a week of minor consolidation which led the prices to its highs of $1297. Price broke through the downward which suggests further bullishness. Such bullishness is only possible if $1297 is taken out on a conclusive basis. Prices are expected to move towards $1321 once the triple top pattern is broken on the upside. There is very less chance of moves as such technical patterns are strong reversal signals and trades on the long side should be taken with extreme caution.
view – Bears were stunned by the brisk upmove but came back to life when they did not allow the price to go higher above the $1297 respecting the Triple Top pattern. This resistance did not allow the price to go above the upward which suggests selling at highs. Prices are expected to correct after a 5 week rally from the lows.
On larger terms, Gold looks neutral with a negative bias. Prices are expected to correct though it can remain sideways unless a direction is created on a conclusive basis.
Possible trades are on both sides, Gold can be bought above $1301 for the targets of $1309 and $1321 with a stop loss placed below $1291. Longer term target $1346.
Gold can be sold below $1291 for the targets of $1278 and $1267 with a stop loss placed above $1301. Longer term target $1261.