Technical outlook:
Gold correction continues to drift sideways, and the yellow metal remains vulnerable for yet another drop until prices stay below the $1,520 resistance. The metal has tested fibonacci 0.618 resistance of the recent drop between $1,520 and $1,445 levels (not highlighted here), and a high probability remains for yet another drop towards $1,415 levels, going forward. Please also note that immediate price resistance is intact at $1,520. Unless we see a break above that, bears are expected to remain in control. Also note that price support is seen at $1,400/10 levels, along with the fibonacci 50% retracement at $1,412, which could be marked as a potential bullish reversal zone. Having said that, the medium- to long-term structure for Gold still looks to be constructive for bulls, and a rally above $1,557 remains possible after the above correction is complete. Conservative traders may stay aside for a while and allow prices to drop below $1,445 towards support, before initiating fresh long positions. Aggressive traders might want to sell with risk at $1,520 and projected targets around $1,415 levels, before turning bullish again.
Trading plan:
Aggressive: Short against $1,520, target is $1,415
Conservative: Flat for now. Look to buy around $1,410/15, stop $1,380, target is open.
Good luck!
