In both MCX and international market gold’s price action is trading within 1200 – 1260. Market structure on Daily time frame is showing some interesting developments. Also it’s obvious to note that gold is in range bound fluctuation since Mid February. Dollar’s price action and investor sentiment is lately affecting gold prices. Current Price value of Gold is 1250.50 as per international spot market.
Below is the price chart of Gold on Daily time frame with my price action observations.
1. Price action is consolidating within previously formed large bullish candlestick.
Climatic bullish candlestick that formed on Feb 11th 2016 became the precedent high and low of the current market structure. As you can notice the chart, consolidation is within the candlestick’s high at 1262.54 and low at 1198.43. This tells us that buyers are restricting the selling pressure and there are possibilities of weak hand players getting trapped by this structure.
2. Market several times tested the Resistance level at 1260.00.
Price action is consistently testing the resistance level at 1260.00; it even violated the key level at some instances. This again confirms the urgency and behavior of buyers to bid at higher prices and intention of sellers to defend the resistance level.
3. Watching the price action can provide probabilistic trading opportunities.
Tight and consolidating ranges often give high probabilistic trading setups. It will be interesting to see what happens to this market structure if price action develops further. Traders should focus on Gold’s key levels at 1260.00 and 1200.00; also keep an eye on lower time frame price action. Range trading can offer successful trading opportunities; we cover more about range trading in our trading course.
