The US retail sales data softened the US dollar and made green ticks in gold. Gold made a high at the level of $1,302.70 yesterday. This year gold started in a good mood reaching a 3-month high. The rally we have seen so far came from short covering. In Asia's trading session just now gold has made a high at $1,307.0. In the hourly and daily charts RSI gave a sell signal. August 28, 2013 RSI reached 71.71, at that time gold was trading at the level of $1,433.3. Currently, in the daily chart RSI stood at 70 and the price is trading at the level of $1,307.0. Whereas, in the hourly chart RSI stood in the overbought zone at the level of 75, which does not favor bulls. Probably, gold can stretch its leg up to $1,326, chances are remote.
We recommend to start selling from cmp $1,306.5, targets are $1,300.0, $1,294.0, $1,285.0, and $1,277.0.
