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The US dollar traded lower recently which also helped the precious metals to gain buyers. GOLD and SILVER managed to trade a bit higher. There is a monster resistance waiting on the upside for GOLD which might stop buyers to take the prices of the yellow metal higher. There was no major release in the US dollar, and today too there is hardly any major economic release. So, there is a chance that we might witness some profit taking moves in GOLD. However, we need to see how GOLD behaves if it manages to trade higher from the current levels.
There is a critical bearish trend line formed on the hourly chart of GOLD, which is more of a major resistance area as the prices stalled on a number of occasions around the $1178-80 levels. However, there is a positive emerging, as GOLD has closed above the 100 and 200 hourly moving averages. This might encourage buyers in the short term. The hourly RSI is above the 50 mark, which is another bullish sign. There is a chance of a spike higher in GOLD considering all the mentioned bullish signs, but we cannot deny the fact that there is a major resistance around the $1180 level.
We need to see how GOLD sellers react around the stated resistance area and if they manage to defend it, then GOLD might move lower again. Alternatively, a break and close above the same might call for a run towards $1200.
Overall, one might consider selling around the trend line resistance area as long as it remains below the same.
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Posted By IKOFX Technical Team: Online Forex Broker
Website: http://ikofx.com/
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