FX.co ★ Strategy of the day on the GOLD

Gold is currently testing the intermediate resistance of its medium term bearish channel at 1,620 suggesting a decline. However, a break of these levels will allow it to reach the upper limit of its channel at 1650.

Technical indicators provide sell signals and until the resistance is not broken, the assumption of a decline is most likely. Bollinger bands are much discarded as a result of a strong decline these days. Stabilization is expected in a short term.

As Gold is currently testing the intermediate resistance of its channel, we recommend 2 scenarios: the first one is the hypothesis of a decline where we recommend a sell on the level of 1,620 with the 1st objective at 1,610 and then at 1,607. A break through 1,623 will invalidate this scenario. The second scenario is a break of its resistance where we suggest a “buy stop” which means to buy the gold as soon as it has broken through its resistance of 1,620 with the 1st objective at 1,630 and then at 1,633. A break through 1,617 will invalidate this scenario.