Blue lines- Fibonacci extension targets
Gold price as expected by our previous analysis, has produced a bounce above $1,725 resistance towards $1,760-70. Near term trend remains bullish as Gold price continues making higher highs and higher lows. However I believe upside potential is now very limited. Gold price has reached the 100% extension target of the first leg up. The RSI is at overbought levels and provides bearish divergence warnings. Gold price justifies at least a short-term top and reversal, if not a bigger reversal to new lows below $1,680 taking into consideration the fact that the medium-term trend remains bearish and this is just a counter trend bounce. Support is at $1,757. A break below this level will increase the chances that the upward move from $1,711 is complete.
