In our previous post we warned traders that it was not prudent to be bearish Gold as price was approaching the key upward sloping support trend line at $1,780. Gold was in a bearish short-term trend but when so close to key support, we prefer to turn neutral or bullish.
Red line- resistance
Gold price is bouncing higher. Price has respected the green key support trend line. Only a break below it will make us continue be bearish. Although this bounce could only be a a short-live one, there are increased chances of seeing a bigger bounce towards the red trend line resistance. That is why when trading close to the green trend line, we do not turn bearish unless support is broken. Trading above the green trend line supports the bullish scenario of another attempt towards the red resistance trend line.
