The yellow metal is known as safe heaven investment but at present momentum gold itself is not moving at safe levels. The roller coaster rides can be seen on both side from past couple of weeks. Even some moves pressure us to think that gold is looking for the firm direction as it has struck in the strict range of $1280 to $1324 level. Presently gold is trading below its main EMA and SMA lines which are suggesting us bearish momentum in short term.
It seems like bears are eagerly looking for a break below $1280 level which is a key support level a break below the mentioned key support level will lead to $1270 and $1250 level in near term. From technical prospective we can see a bearish engulfing candlestick which has changed the bias from bullish to bearish as we can see that earlier the bulls are making the setup of rounding bottom pattern where some consolidation phase is the part of the price pattern but last week on Thursday all bullish sentiments has been evaporated.
On the international chart we can see that pair has entered into symmetric triangle pattern and it require a breakout on either side which will give us new buy or sell signal. But there are high chances that we may see a downside breakout as odds are in favor of bulls and daily to weekly bias remains bearish on the gold as long as 32500 level remains intact on MCX and $1310 on Comex.
The $1300 level is a psychological level and gold is trading below that level. Two weeks back gold moved up to $1320 but could not sustain and slipped to $1284 level and then it bounced again but this time rally was limited to $1310 level and slipped to $1290 level which bulls were unable to break the previous swing’s high at that time it created doubt in our mind and traders are advised to go for short at the current levels with the strict stop loss. To have a real bearishness in the yellow metal, bears need to trade and sustains below the $1280 level which will give further bearish momentum and bears will get aggressive below the $1280 level.
A bearish crossover on the MACD indicator is which a recent development on the chart. RSI is also providing us bearish signal from negative territory. The 32320 level is key resistance level followed by 32500 whereas 31400 is key support level followed by 31000 level.
Trade idea:- Odds are in favor of bulls and daily to weekly outlook remains bearish on the yellow metal so traders and investors are advised to go short at 31900-32000 for the target of 31400 and 31000 and with the tight stop loss of 31500 level with the stop and reverse order of 32500. On contrary if bulls trades and sustain above the 32500 level then cut all the short position and sit at long side with the positional targets of 33500 and 34000 in near term with the stop loss of 31400 level.