Technical outlook and chart setups:
Gold seems to have initiated its much awaited counter trend rally on Friday. The metal has bottomed out at $1,240.00/41.00 levels and rallied through $1,265.00 levels after that. It is expected to drop lower in a corrective manner towards $1,250.00/51.00 levels before extending its correction towards $1,300.00/10.00 levels going forward. The wave structure indicates that the counter trend rally is expected to terminate around the past support turned resistance zone at $1,310.00, which is Fibonacci 0.50% of the entire drop between $1,375.00 and $1,240.00 levels as depicted here. It is recommended to remain flat now and look for selling opportunities around $1,290.00/92.00 levels again, while aggressive traders should wait to go long with risk below $1,240.00. Immediate resistance is now seen at $1,305.00/10.00 levels, while support lies at $1,240.00 levels.
Trading recommendations:
Remain flat for now. Aggressive traders are long now with stop at $1,240.00 levels, targeting $1,310.00.
Good luck!
