Written by Harish Shahi, Sr. Commodity & Forex Analyst
Since starting of the June month, we are witnessing that bulls are rocking and seems in party mood as they have made a sharp rally from $1305 to $1408 which is a more than $100 hike in just few weeks and on MCX it made a journey from 32165 to 34468 in the month of June 2019. Well bulls are making successively higher highs and higher lows where a rounding bottom pattern completed successfully which we have mentioned in our previous report.
In our previous report we have written to buy it from 32000 level and our was 34000 which have been achieved by bulls. We are expecting that our readers must have made smart profit from this move and last week the first phase of bulls run completed successfully. Overall gold fueled by FOMC and trade tension between US and China, and we know that gold is save heaven investment at the time of any tension we experience the hike in the gold. Rising trade tensions and the prospect of further deterioration have led to increased levels of risk aversion, further supporting gold.
“Conversely, a possible trade deal between the US and China at the upcoming G-20 meeting in Osaka might lead to some easing in the gold price.” This week’s closing matter a lot, as we can see that on MCX sky is the limit and bulls are making fresh high of 2019, even there is no resistance align but on Comex it has given the valid breakout of $1400 level and gold came at these levels after 6 year i.e. after 2013 year i.e. multi year’s high.
Further buying is still awaited and it seems clearly that bulls have taken the charge now and they will not stop at early stage. Bulls are driving the car and heading towards north side with strong bullish sentiments. The next level is $1433 level where it may face supply pressure and if gold closes below the $1380 level then it will fall down further and we may see trend reversal opportunity in the coming weeks.
Overall short term to intermediate term trend is up so in an uptrend market buy on dips will be profitable strategy. On last Friday we have seen some correction where some profit booking was going on. In the first half of the trading session but the evening session we have witnessed bounce back and bulls got the bullish momentum again. We are waiting for the clear breakout of $1433 level which will give us new buy signal and we are expecting that bulls will arrive at $1470 shortly.
The way bulls are reacting it seems like they are approaching the $1433 level in near term and every dip should be convert as buying opportunity. A bullish crossover on the MACD indicator is providing us bullish signal and providing strength to the bulls. RSI is also providing bullish signal from positive territory. The RSI has arrived into overbought territory so some correction can’t be ruled out. The $1433 level is key resistance level followed by $1450 whereas $1380 is key support level followed by $1360 level. Odds are in favor of bulls and daily to weekly bias remains bullish on the yellow metal.