Gold price pulled back today as expected. Price reached as low as $1,893 but is now bouncing again above $1,900. Price has the potential to push lower towards $1,870-50 but price respects the support trend line coming at $1,890.
Black lines - bearish divergence
Red line - support trend line
Gold price is trading still inside the bullish channel and above the short-term support trend line. As long as price is above $1,890 we expect a new higher high towards $1,920. If the red support trend line is broken we expect price to continue lower towards the lower channel boundary. The bearish divergence is a warning signal and not a reversal signal. At current price levels I prefer to be neutral if not bearish. The upside potential is limited.
