Gold’s price has reclaimed $1,500 mark as the major uptrend resumed but the rallies appear to have been exhausted at the stiff resistance of 1518 levels as it continued the range bounded swings in the minor trend.
That’s where the display of gravestone doji and hanging man patterns occurred at 1,504 and 1,573 levels respectively.
In our recent post also, it has been raised a cause of concern for Gold’s (XAUUSD) rallies in the short run. Bearish patterns, such as, gravestone doji and hanging man have occurred at $1,527.05 and $1,552.14 levels also. As a result, these bearish patterns have hampered the prospects of 6-1/2 years highs, while the major uptrend extends 6-year highs.
On monthly terms, bulls break-out the stiff resistance and hamper the potential triple top formation (refer monthly chart). As a result, the current prices spike off well above EMAs with bullish crossovers, thus, the uptrend has hit 6-years highs as per our previous prediction.
In addition, hammer occurs at $1,200 levels to counter double top formation on this timeframe.
While both RSI and Stochastic curves show upward convergence to this robust uptrend that signal intensified bullish momentum.
To substantiate this buying stance, the uptrend is likely to prolong on the bullish EMA & MACD crossovers.
Well, contemplating all the above technical rationale, on trading grounds, at spot reference: $1,510 levels, one can think of trading tunnel options spread with upper strikes of $1,514 and lower strikes at $1,495 levels.
Alternatively, on hedging grounds, we advocated long positions in September month’s CME gold contracts. We now like to uphold the same strategy by rolling over the contracts for October’19 delivery as we could foresee more upside risks amid global financial crisis. Buying interests are mounting on safe-haven sentiments amid global slowdown which is still imminent.
