By Sreekumar Raghavan
Gold bulls may be in for disappointment as technical charts still show the confirmation of a bearish trend for some more time. On Wednesday, US Aug futures gold have gained close to 1% at $1590.40 on stimulus hopes and weaker data from both sides of the Atlantic.

Christopher Lewis of FX Empire still finds pretty strong support only at $1540, real support may be even lower at $1500. Investors need to start aggressive buying only if prices rise above the current trading range of $1640-1540 and aggressive selling below $1500 levels, according to him.

“We need to break out of the recent consolidation rectangle between the $1640 level, and the $1540 level to even begin to think about taking action in this market,” according to Christopher Lewis.

According to Jamie Saettele of CMT, a bearish triangle may be unfolding suggesting that gold could remain in tight range before another breakout is possible.

On the fundamental side, Indian demand remains muted on seasonal weakness, and fears of weaker monsoon that may dent demand ahead in the festival season beginning August to November.CFTC data for July 17 shows, large traders long positions had declined by 5271 contracts indicating the market is now raising bullish bets on the yellow metal.

It may be recalled that in the week upto July 3, money managers had raised their bullish bets on gold by 30% to 108,278 but there after netlong positions which again rose further but without a bullish trend seen I the market. Fund liquidation could have resulted from rise in such unusual gains in net long positions, analysts said.