Gold price has managed to break above $1,580 and bulls are now trying to recapture $1,600. We are now at a major Fibonacci retracement level and the chances of a reversal and rejection here are high. Bulls need to be very cautious.
Green rectangle - support area
Gold price as expected has bounced off the green support area as we expected in previous posts. Gold has now reached the major 61.8% Fibonacci retracement level resistance. This is major short-term resistance level that traders should not ignore. A rejection here could bring Gold price sharply back towards $1,550 if not lower. Short-term support is at $1,560-50. If broken we should consider the scenario where this bounce was only a counter trend rally as the main scenario. Gold price could then move even below $1,450. However it is still too early to say anything as in the Daily chart the oscillators have just started turning upwards. A rejection would be a bad sign. That is why we keep a close eye on the Fibonacci level and the short-term $1,560 support.
