Gold price has formed a bullish flag that could bring it to $1,270-$1,280. The short-term trend remains bullish. Price is supported and there are increased chances of a new upward breakout. Monday's big trend reversal to the upside has changed our medium to long-term view and has diminished the chances of a new low below $1,130.
As can be seen in the medium-term chart above, there is a big bullish flag formed after the reversal on Monday. Support by the Ichimoku cloud is held. Support is at $1,190 and $1,170. As long as price is above those levels we should expect a new upward move towards $1,270. Confirmation will come with a new high above $1,220.
Short-term trend is neutral. Support is at $1,190 where the 38% Fibonacci retracement is found. Resistance at $1,220. If $1,190 is broken, we should expect gold price to move towards the 50% or 61.8% Fibonacci retracements. As long as gold price is above $1,140-$1,130, we should expect a new high towards $1,170.
