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Gold is currently testing the intermediate support of its medium-term bearish channel at 1,730 suggesting a rebound. However, a break of these levels will reach the lower limit of its channel at 1,710.
Technical indicators provide buy signals and until the support is not broken the assumption of a rebound is most likely. Bollinger bands have greatly tightened in the recent days showing a decline in volatility and the imminence of a violent movement.
Gold is currently testing the intermediate support of its channel, we suggest 2 scenarios. The first one is the hypothesis of a rebound where we recommend a buy on the level of 1,730 with the 1st objective at 1,740 and then at 1,745. A breakthrough of 1,727 will invalidate this scenario. The second scenario is a break of its support where we recommend a “sell stop” which means to sell gold as soon as it is broken through its support of 1,730 with the 1st objective at 1,720 and then at 1,717. A breakthrough of 1,733 will invalidate this scenario.
