Gold: Bears are driving the car and in the mood of long drive

Harish Shahi Indian Market View

Comex Gold

LTP: $2488

Daily chart of Comex Gold looks very weak and indicating bearish momentum. Gold turned down from $2531 level and moved down below $2500 which is a psychological pressure on bulls. The way bears are reacting on the chart we may announce for short term that gold has formed top and any buying above $2535 level with 4 hourly sustainability will change the outlook from bearish to bullish. It will be not an easy journey for bears also as they have to face many acid test/hurdles i.e. support level like $2453 and $2435 level.

From technical prospective we can see a rounding top pattern is in process of formation on H4 chart which suggest us to have a bearish view as long as 2530 level remains intact. Overall pair is trading below all the major and minor EMA lines. On daily chart parabolic top has formed. The 2435 level is only major hurdle for bears if we see panic selling below this level we may see selling around 2350 level, 2275 level and furthermore.

On fundamental prospective ADP Employment, ISM Service PMI, Jobless claim and NFP is in line in the week, keep an eye on the data. There are high chances that we may see selling pressure in the gold. Overcrowded long positioning could be the reason the commodity is not rising as expected. Sustaining below $2500 level i.e. psychological level is providing strength to the bears. Gold is falling despite risk sentiment turning negative following weak US Manufacturing data.

Gold H4 chart with RSI and Major Moving Average

Author

Harish Shahi

Indian Market View

Harish Shahi did MBA in Energy Trading and he is a seasoned Head of Research in Commodity and Equity Domain. He contributed his view on difference financial news channels like ET Now Swadesh, Zee Business, NDTV Profit . 

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