Gold Technical Analysis: At lowest since Dec. 27, further drop likely albeit after minor bounce

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Gold is currently trading at $1,271, the lowest level since Dec. 27. 

The drop to 3.5-month lows bolsters the already bearish technical setup on the daily chart. 

The metal, therefore, appears on track to test support at $1,263 (trendline rising from August and November lows), albeit after a minor bounce, as the 4-hour chart relative strength (RSI) looks to be creating a higher low (bullish divergence). 

4-hour chart

  • As seen above, the latest 3.5-month low on price isn’t confirmed by the RSI, which could end up creating a higher low if price sees a minor bounce. 
  • The bullish divergence, if confirmed, would open the doors for a minor bounce to $1,280. 

Trend: Minor bounce likely

 

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