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Gold approaches the intermediate resistance of its medium-term bearish channel at 1,691. It seems that a decline was initiated. However, a break of these levels will free a large potential and reach the upper limit of its channel at 1,719.
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 is currently testing the intermediate resistance of its channel, we suggest 2 scenarios. The first one is the hypothesis of a decline where we recommend a sell on the level of 1,691 with the 1st objective at 1,680 and then at 1,677. A breakthrough of 1,694 will invalidate this scenario. The second scenario is a break of its resistance where we advise a “buy stop” which means to buy gold as soon as it is broken through its resistance of 1,691 with the 1st objective at 1,702 and then at 1,705. A breakthrough of 1,688 will invalidate this scenario.
