Overview:- By analyzing the daily technical chart we can see that from last couple of weeks gold was trading in the very narrow range and now bulls have given clear cut breakout at upside and showing the bullish momentum. Gold has given us closing at $1500 before Christmas which is a positive signal itself and today it followed the same upside momentum and trading at $504 level. Gold is trading and sustaining above $1500 level which is a psychological level.
Technical Analysis: – From technical prospective we can see that short term to intermediate term trend is up so in an uptrend market buy on dips will be profitable strategy and the way bulls are reacting it seems like we got the perfect dip and the current levels are not going to repeat again and we should catch these levels to accumulate the gold. A bullish marabuzo pattern candlestick has been posted on the daily chart which is very rare and we got the reaction of it also. Well bulls are trading and sustaining above the moving average lines and providing us bullish signal. The $1560 level is about to test in the coming weeks.
A bullish flag pattern has been formed on the weekly chart which indicates that we should go for buy. Odds are in favor of bulls and daily to weekly bias remains bullish on gold as long as $1470 level remains intact. A bullish crossover on the MACD indicator is a recent development is whereas RSI is turned upside above 50 level. A short term rounding bottom pattern is in process of formation which will complete when bulls will arrive at $155-60 level.
Fundamental Analysis: – The US China trade war is still point of concern, let’s see where the final negotiation will take up and for the time being we are expecting a positive closing at the end of the year.
What next:- The bulls are dominating the bears and leading in the game and playing at front foot and it seems that bulls are going to continue with this game and will not provide any chance to bears. We need a daily closing above $1520 level overall the current picture is bullish rosy picture.
On contrary A daily closing below $1470 level will change the outlook from bullish to bearish. Overall gold is trading and sustaining above minor and major EMA lines which is providing strength to the bulls. The $1470 level can be considered as key support level followed by $1450 where $1530 is a key resistance level followed by $1550 level.
Trade idea:- Based on the chart and study above we would suggest that positional traders may go for buy at current levels $1500 for target of $1525 and $1545 level with strict stop loss of $1480 level, every dip should be convert as buying opportunity as long as $1470 level remains intact.