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Trading strategies for Copper and Lead by Bhavik Patel of Tradebulls Sec

Copper prices are far from 20 DMA and, historically, we have seen mean reversion happens when prices run too far from 20 DMA

Topics
Markets | commodity outlook | copper

Bhavik Patel  |  Mumbai 

Lead has made ‘Shooting star’ candlestick formation.
Copper, on daily scale, made ‘harami’ candlestick pattern which is a reversal formation

Intra-day volatility (VIX) is increasing in . On Tuesday, gold fell from Rs 53,999 to Rs 51,800 in a span of 30 minutes before recovering back to Rs 53,825. also fell around Rs 6,200 in 30 minutes before recovering by Rs 5,700. The rally in and this week is helped by weak US Dollar (lowest since 2018) and 10 YR US Treasury yield which is trading around lowest in a week. $2000 seems to be strong hurdle for and if prices close back to back above $2000 this week, then the rally will be enough to test $2089 resistance. But if fails to close above $2000 this week, we may see another potential decline.

US lawmakers remain locked in a stalemate over a potential new coronavirus stimulus deal and any breakthrough in reaching another stimulus deal would led to decline in . Any positive development from Vaccine front would also boost risk sentiment and keep pressure on gold prices. As long as yields stay below 1%, gold prices will remain positioned to the upside. Bouts of volatility and pullbacks in gold prices will occur time to time.

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First Published: Fri, August 21 2020. 08:10 IST
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