Overview:
Since our last analysis, gold has been trading sideways around the price of $1,093.00. As we had expected, the price tested the second major support at the level of $1,085.00. We can observe a massive volume spike (selling climax), which is a sign that selling gold at this stage looks risky. A trend is still downward, but since we got the massive volume spike at the critical support level we may expect an upward correction to take place. According to the price action, we have support levels at the price of $1,095.55 and stronger resistance level at the price of $1,102.00-$1,106.00.
Daily Fibonacci pivot points:
Resistance levels
R1: 1,088.37
R2: 1,090.80
R3: 1,091.00
Support levels:
S1: 1,088.00
S2: 1,087.95
S3: 1,087.35
Trading recommendations: Be careful when selling gold at this stage since the price is testing the key support level and we got the massive volume spike. Anyway, if the price breaks the level of $1,079.50 in a high volume, we may see downward continuation.
