By Mustafa Nadeem
Gold prices have given multiple break outs on the charts and is technically poised to give handsome returns. It will continue the same performance in second half of 2016 and we may see more funds flowing towards gold which is considered as safe haven for investors.
Gold on monthly chart has breached out of a falling wedge pattern which is considered as a bullish reversal pattern. We are expecting prices to retrace towards technical target of $1,475. On weekly chart a smooth bottom formation is seen in and “almost” inverted head and formation breakout is seen for which neckline comes at $1,341 and a correction there can get prices to levels of $1,341. We look at it as a buying opportunity for investors.
For Aug Series, MCX Gold is bullish and a correction to levels of Rs 31400 – 31200 per 10 gram will be healthy in nature and on charts it will be seen as an opportunity to enter for next round of bullish rally. Gold August has given a break out from consolidation channel, which is technically a bullish flag pattern, for which target comes at previous highs of Rs 35,000 per 10 gram. The correction towards Rs 31,400 per 10 gram will retest the channel and a buying can be seen at those level. Buy on dips strategy with a trend following system can be used in Gold MCX.