Gold: Is It Still Sailing High?

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Geopolitical concerns along with US-Saudi tensions impacted global equities and sell off was well seen in the markets. Owing to highly volatile condition in the market, investors are once again switching towards Gold, which has always been recommended and opted as Safe haven at times of volatile conditions. Let us see what are the expectations and views about the gold price levels; and where do we see the price movement and its levels?

Moderate start for the global markets was seen in today’s session, but volatility prevails in the current scenario. From a 19-month low level seen in August, the gold prices are setting for a decent recovery. Many analysts even estimate gold to average around $1300 in year 2019.  

Key points under consideration when looked from Global and Indian Market Scenario:

  • Globally gold recorded fourth week of gains and rose 0.2% on Friday to $1234.35 ounce during the intraday trade, with an early gain of 1% to $1243.32, highest level since mid-July.
  • Soverign gold weakened by INR 100 to INR 24700 per piece of eight grams
  • Price of Silver coins remained unaltered at INR 75000 for buying and INR 76000 for selling of 100 pieces.
  • On a weekly basis silver delivery fell by INR 50 to INR 38710 per kg.

Commodity gave the first signal of buy on October 9, with the formation of “Doji” candle indicating uncertainty in the markets. Increase in geopolitical concerns supported the Gold move. On October 10, clear signal of bulls taking lead over sellers was generated with the formation of small bull candle on the price charts and positive crossover on MACD indicator. On October 23, Gold recorded high levels of $1239.90. On Friday, October 26, Gold made a high of $ 1243.43 along a wick indicating rejections on the upside and sellers taking lead over buyers. Currently, Gold is trading at the levels of $1230.72, and impact is backed technically with the formation of reversal candle along with higher highs on charts with trading near the upper end of the bollinger bands and negative divergence indicated by the RSI indicator on Friday.

Technically, overall Gold prices are trading well above mean deviation of bollinger bands and there is slight indication of negative divergence on the price charts, looking at the major indicators, RSI with weakness in positive divergence along with price charts and MACD in positive territory. This is indicative of Gold having upside room on long term till minor support levels in near term are indicated with bounce back to higher levels in long term.

Levels of $ 1239.59-$1240.54 play a small resistance zone, as formation of triple top can occur on the charts. Once these levels are breached Gold can move to the higher price zone till the levels of $1248-$1255. Major support levels will be $1226.37-$1223.53. Levels of $1217- $1215 will play key support zones in deciding reversal of trend. At current juncture, with the price level around $1234, slight weakness is indicated but with overall bullish trend set up on the charts, the commodity still holds good outlook.

Geopolitical concerns and growing demand can take Gold through highly volatile sessions.


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