By analyzing the daily and technical chart of yellow metal we can see that a tug of war between bulls and bears from past couple of days and pair is trading between $1290 to $1310 level which is a small consolidation phase. The way bulls are dominating the bulls it seems like $1320 will be first arrival for bulls and a valid sustainability above $1320 level will open the way towards $1350 level.
From technical prospective we can see that on it turned up on Monday itself with the formation of bullish marabuzo candlestick and today at the time of writing it is also moving up. Well the way bulls has reacted at these levels it seems like short term downside momentum has been over now and for the long term traders it’s right time to buy once again. By applying the fibonacci retracement line we can see that it has retraced almost 61.8% level which is golden opportunity to buy once again. We will keep our short to intermediate bias bullish on the gold as long as $1280 remains intact.
This week precious metal traders will continue to monitor movements in the U.S. dollar, one of the biggest factors for gold, with the greenback in turn taking its cue from expectations around the Federal Reserve’s monetary policy plans on Tuesday. The US retail sales and CPI data is also scheduled in this week, giving them additional opportunities to reassure market watchers that they will take a patient approach towards monetary policy.
On international chart, the $1300 level is a psychological level and gold is trading near to that level, i.e. $1306. To have a real bullishness in the yellow metal, bulls need to trade and sustains above the $1320 level which will give the base to bulls.
Well long term to intermediate term trend is up so in an uptrend market buy on dips will be profitable strategy and every dips should be convert as buying opportunity. A bullish crossover on the MACD indicator is generating bullish signal and supporting the bullish momentum. RSI has come out from overbought territory and now it’s providing us fresh buy signal. The $1320 level is key resistance level followed by $1350 whereas $1290 is key support level followed by $1280 level.