On the chart –
Gold kept on adding to the gains with a gap up which was followed by more incremental buying pushing the prices to 1 yr highs. The gap up above $1340 now suggests that the stops for the long trade is shifted to this level from $1317. Technically it seems the cup formation is expected to complete in coming days/weeks and the prices are expected to achieve new highs. We have 2 scenarios –
1. Gold’s closing above the resistance of $1342 suggests more upside. With this momentum gold can rise further to $1356 which failed to hold in the past week. If this level is crossed gold can move higher to $1375 where the cup formation ends and it will act as a great resistance. Now if this is crossed gold can see more upside to highs of $1391 which is less likely until more positive news for gold comes.
2. Again there are no short trades available unless $1342 breaks down but still the downside is limited to $1331 which now acts as a new good support. If this level gives way gold can fall to $1317.
view – Bulls were again in a party mood as they eroded key resistances one at $1342 and other at $1356 in the week. Even if they failed to hold above the $1356 mark the closing over $1342 keeps them strongly in the game and another run towards $1375 is not ruled out. Bulls upped their game with the gap up and its sustained trend for the week which now suggests $1342 becomes a good support. Trend and fundamentals remain with the bulls and the prices are expected to rise further.
There is no perspective to the metal unless key supports are broken.
On larger terms, Gold remains in firm 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 $1352 for the targets of $1356 and $1375 with the stop loss placed below $1342. Longer term target $1391.
There are no short trades available still gold can be sold under $1342 for targets of $1331 and $1317 with a stop loss placed above $1356.