Gold price is moving higher but still below the key pivot level of $1,850. Over the last few weeks we mentioned many times the importance of the $1,850 level both as support and as resistance. It is an important pivotal level that when broken could dictate the trend for next weeks.
Red lines - bullish divergence
Blue line - resistance
Yellow rectangle - target if resistance is broken
Gold price is trading below the blue resistance trend line. The recent lows in price are not followed by a new RSI low. As we mentioned yesterday there are signs of bullish divergence. If bulls manage to recapture $1,850 then we should expect at least a move towards the yellow rectangle area at the $1,866-70 area. Next target would be the $1,890 level. Until then bears remain in control and a rejection combined with a lower low is still in play.
