We are witnessing 4th consecutive days rallies in gold’s (XAUUSD) price. Bulls resume upon resembling hammer formation at trend line support.
Consequently, rallies bounce back above DMAs, resembling hammer occurs at $1,478.93 levels.
While both leading oscillators (RSI and Stochastic curves) indicate gaining strength at this juncture.
On a broader perspective, bulls break-out stiff resistances and major trend retraces more than 50% Fibonacci levels from the December’2015 lows of $1,046.23 as hammer counters at the double top neckline.
The current prices, on this timeframe, spike off well above EMAs, while both leading oscillators substantiate (refer monthly chart). Thereby, the precious yellow metal price is on the verge of extending 9-years’ highs and likely to hit a fresh nine and a half years highs.
Both RSI and Stochastic curves, on this timeframe, show the upward convergence to the robust uptrend that signal intensified bullish momentum.
To substantiate this buying stance, the bullish EMA and MACD crossovers indicate the uptrend is likely to prolong further.
Well, contemplating all the above technical rationale, on trading grounds, at spot reference: $1,509.131 levels, one can think of trading one touch call options with upper strikes of $1,531 levels.
Alternatively, on hedging grounds, we advocated long positions in September’19 month’s CME gold contracts. We now like to uphold the same strategy by rolling over the contracts for November 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.
