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Gold approaches the intermediate resistance of its medium term bearish channel at 1,665 and seems to initiate a decline. However, a break of these levels will free a large potential to reach the upper limit of its channel at 1,690.
Technical indicators provide buy signals but, until the resistance is not broken, the assumption of a decline is most likely. Bollinger bands have stabilized showing a more regular volatility.
Gold approaches the intermediate resistance of its channel, so we recommend 2 scenarios: the first one is the hypothesis of a decline, then we recommend to sell at the level of 1,665 with the 1st objective at 1,655 and then at 1,652. A break through 1,668 will invalidate this scenario. The second scenario is a break of its resistance, then we recommend a “buy stop”, which means to buy the spot rate as soon as it has broken through its resistance of 1,665 with the 1st objective at 1,675 and then at 1,678. A break through 1,662 will invalidate this scenario.
