FX.co ★ Technical analysis of gold for October 6, 2016

Gold price remains in a short-term bearish trend approaching the first important medium-term support levels of $1,250 where I expect to see the first important bounce. Gold price is now confirmed in a correction phase correcting the entire rise from $1,045.

Red line - resistance trend line

Blue lines - bearish channel

Gold price is inside a downward sloping bearish channel. With short-term oscillators starting to give some bullish divergence signals, we are soon to expect a bounce most probably towards the red trend line resistance which was once support. Only above $1,330-50 we will have a medium-term trend reversal signal.

Gold price is correcting the entire rise from $1,045 and this is most probably the first part of the decline expected to reach $1,250. A bounce towards $1,300-$1,330 will then be expected. The final and third part of the correction could push price towards $1,170. This is a rough roadmap on what we could expect.