Gold has fallen more than 7 percent off its five months high (Above 1,300), last attained in January. The monthly loss comes on the heels of USD strength and easing geopolitical tensions in Europe. The fresh batch of rhetoric has been a drag for gold prices of late with price action felling to a fresh low at 1,190. Prices has stalled above the key technical support at 1,190 and and is backed closely off the Fibonacci Retracement support at 1,130.82.
Gold price end the week in positive territory, advancing 0.8 percent, snapping a four-week losing streak. Following Federal Reserve Janet Yellen’s hints at caution over interest rates hike, the petering dollar strength has provided support for gold testing the fresh low at 1,190 level twice, forming a short-term double bottom. Indeed the market did fell to a fresh low before rebounding to test the 1220 resistance range. This is an important level and if gold is going to work higher then it should do so now.
As one can see, Gold bears still have the near term technical advantage on the daily chart as the downtrend line is still in place. Presently trading in a narrow range right around Fibonacci Retracement 50.0% and 61.8%, the precious metal is experiencing solid support. Resistance continues to be seen at the high of 1,220 level. With that in mind, a convincing break above the interim resistance could expose the performance of the price complex to a test at Fibonacci Retracement 38.20% – 1,239.