FxWirePro: Bulls in bullion market bounce above 21-DMA on dragonfly doji despite struggling major trend - Wise to uphold long hedge

Gold (XAUUSD price) has formed “dragonfly doji” that evidences upswings above 7 and 21-DMAs, while both price and technical indicators move in tandem (refer daily chart).

Whereas bears in the intermediate trend resume after failure swings at stiff resistance & hits 13-month lows, most likely hammer pattern (refer monthly chart).

For now, more rallies seem to be potential event on intensified bullish momentum signalled by both the leading oscillators (RSI & Stochastic curves) and bullish MACD crossover.

We maintain our long exposure in precious metals, while choosing to hold off on re-establishing selected long recommendations in base for now. 

Our previous long recommendations in precious metals this year were admittedly, but also frustratingly, ill-timed.

Nevertheless, despite a rallying US dollar, we have been very hesitant to initiate even tactical shorts considering the strong underlying demand, bullish risks around sanctions, and our bullish underlying base case views.

As long as the dollar continues its recent bullish breakout, metals prices would be hard pressed to break out higher from here in our opinion. 

Currency Strength Index: FxWirePro's hourly USD spot index is flashing at -141 (bearish) while articulating (at 10:17 GMT). For more details on the index, please refer below weblink:

http://www.fxwirepro.com/currencyindex