On the chart –
Gold closed above crucial $1291 mark. The circle range is finally broken and the now is shifted to $1284 (black dashed line) which is confirmed by the rising black dashed . With such a closing the metal is expected to go higher above the $1300 mark as all elements which have a big impact on the prices have been ruled out for sometime, thus creating a smooth sailing for the metal. We have 2 scenarios –
1. Gold prices have regained the charisma as they took support at $1275 in the volatile fall then climbed back higher above $1291 thus indicating buying at lower levels. With such a momentum gold can climb higher to $1297 where it saw resistance. If the prices breakout above this level gold can further rise to $1307. If this point is crossed it can surge higher to $1317.
2. There are no short trades available in a market but still if the price breaches the at $1284 it can fall to $1281 which is again limited as this is now a good support for the metal. Now if this is taken out gold may see further downside to $1271 which is the biggest support and the lower end of the . If this is broken gold might slip towards $1257.
view – Bulls continued their charge as the prices kept on having a steady rise. Bulls must be extremely happy with the close above $1291 which suggests positive mood which will lead the metal to new highs in coming days/weeks. With the Fed ruling out rate hikes in near future the metal has a clear path for an upsurge as it was one of the critiques of the prices. Dovish-ness from Fed accompanied with poor data coming from America can fuel the prices towards $1307 and higher.
There is nothing worth mentioning on the side as the close indicates continued bullishness. Bears can come into play only if $1271 is breached.
On larger terms, Gold remains in the grip with the prices expected to create fresh highs.
Possible trades are on both sides but largely on the long side, Gold can be bought above $1291 for the targets of $1297 and $1307 with a stop loss placed below $1281. Longer term target $1317.
Gold can be sold under $1281 for the targets of $1271 and $1257 with a stop loss placed above $1291 though such trades seem unlikely in the given situation.