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Cryptocurrency crash will support rally in gold: Bhavik Patel of Tradebulls

We are bullish on gold and expect gold to test Rs 48,800- Rs 49,400 this week

Topics
Gold  | Commodity Exchange | commodity trading

Bhavik Patel  |  Mumbai 



Gold
Gold

Gold prices started climbing steadily from the low of March 31, which came around $1680, but the momentum came when prices broke the psychological resistance of $1800 which saw short covering. After that, for a week, prices consolidated but are now moving up, breaking its immediate resistance of $1852 in COMEX. May 17’s gains ($29 rally) indicate that gold, at least for now, no longer remains range bound and has broken above its strong resistance level which occurred at approximately $1852, the 200-day moving average.

Now is trading at 4-week high on COMEX. The threat of rising inflation, coupled with economic uncertainty following disappointing US employment and retail numbers is prompting investors to find safe-haven assets again. tends to outperform when economic data is weakening and underperforms when economic prospects improve. Falling of cryptocurrency market also helped in giving strong rally. Hedge fund managers have started increasing their speculative long positions and reducing their short positions. We are bullish on gold and expect gold to test Rs 48,800- Rs 49,400 this week. Any dips near Rs 47,900 is ideal level for taking long positions with stoploss of Rs 47,400.

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First Published: Thu, May 20 2021. 08:02 IST

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