While the major pairs such as EURUSD, AUDUSD and NZDUSD continue to move lower GOLD stayed on the top. It recently climbed above the $1290 level to set a new monthly high. Today, it even test the $1300 level, which itself is a major barrier in the near term. Most likely, GOLD might continue to trade higher, but we need to see how it behaves around resistance levels such as $1310-20. So, buyers need to be careful moving ahead. GOLD might correct a bit lower in the near term, which can be considered as a buying opportunity. There is no major release lined up in the US today, so it would be interesting to see price action in GOLD.
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There is a monster bullish trend line formed on the hourly chart of GOLD, which might continue to act as a buying zone for GOLD buyers. It is currently around the $1300 level and there is a possibility of a move back towards the highlighted trend line. The most important point is that the same trend line is coinciding with the 23.6% fib retracement level of the last leg from the $1254 low to $1302 high. So, a lot of buying interest might emerge if GOLD reaches the mentioned area. The hourly RSI is around the extreme levels, which can act as a catalyst for sellers for the short term.
On the upside, a reaction around the $1310 level is likely if GOLD reaches there. However, the most important one is around $1320.
Overall, one might consider buying dips in GOLD as long as it is trading above the highlighted trend line.
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Posted By Simon Ji of IKOFX
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