FxWirePro: Bulls in bullion halt at pivot point (50% fibos and 21-SMA), $1250 on cards upon breach above – Long hedge via near month tenors

The gold price has constantly been dragging the rallies above 7DMA (refer daily charts) ever since it tested the support at 23.6% Fibonacci levels on weekly plotting to the current 1213 levels (refer weekly plotting).

Both leading & lagging indicators confirm bullish swings, current prices well above DMAs heading for the resistance of 1250.18.

As the bulls break major resistance at 1175 marks (i.e. 38.2% fibos) and the current price spike above 7SMA with bullish momentum.

We see upside traction for gold prices even on daily and weekly plotting as both leading & lagging indicators confirm bullish swings, the current prices remain consistently well above 7DMAs sensing the stiff resistance of 1213.18 (i.e. 50% Fibonacci retracements) and 1217.1130 levels (21SMA).

Can bull swings beach 50% fib. Ret? Any spikes above 21SMA with bullish momentum may head for $1250.

The stochastic oscillator has reached overbought region on dailies but no traces of %d crossover and this leading oscillator on weekly term has been popping up with buying pressures as it has shown a clear %k crossover from the oversold region.

While RSI also evidences healthy bullish convergence on both timeframes that indicates the strength in the ongoing uptrend.

MACD, on the other hand, indicates prevailing upswings to prolong further.

Hence, we foresee further upside movements up to 1250 that seems to be very much on cards but bull swings may go little flat as it senses struggle to break this significant resistance level.

Trade tips:

Contemplating above technical reasoning, as both stochastic and RSI noise with strong momentum in buying interests as they are converging to the ongoing upswings, we advocate long hedge which is the strategy to lock in the price of a product or commodity to be purchased sometime in the future. Hence, the long hedge is also known as input hedge. So, stay long via futures contracts of near month futures of gold, Should the underlying commodity price rise, the gain in the value of the long futures position will be able to offset the increase in purchasing costs.