Gold bears entered the market on Tuesday, driving the precious metal to two-week lows. The 50% Fibonacci retracement level of the upleg from 1,196 to 1,230, at 1213 is currently acting as a barrier to steeper declines on the four-hour chart.
The MACD though warns that bearish actions may break this wall as the indicator seems to have already started a new bearish phase below its red signal line. Yet the RSI suggests that the market is very close to its oversold area, suggesting that upside corrections cannot be ruled out either.
On the downside and below the 1,211 trough, traders could look for support around the 61.8% Fibonacci of 1,209 before attention turns to the 1,203 mark. Below that, the way could open towards the 1,196 bottom, where any decisive leg lower would where any decisive leg lower would resume the bearish pattern off 1,243.
Alternatively, a bounce higher could pause around the 38.2% Fibonacci of 1,217, while gains above that obstacle could increase until the 23.6% fibonacci of 1,222. A move above the 1,230 top may bring more buying interest for gold.
Despite the recent sell-off, the precious metal remains neutral in the bigger picture, trading sideways between 1,243 and 1,196.
To sum up, gold is in bearish mode in the short-term timeframe, while overall it continues to move sideways.
