Gold has been maintaining a neutral bias for just over a month now after entering a consolidation phase. The downtrend from a multi-month high at 1357.47 has not shown signs of reversal yet as the market remains well below the mid-point of this decline to 1260.59.
Prices are currently trapped below the 23.6% Fibonacci retracement level at 1283.39. This resistance level needs to be breached to see a move towards the key 1300.00 level. But only a rise above the 50% Fibonacci at 1308.95 would shift the market’s focus back to the upside. Breach of resistance at 1320.13 (61.8% Fibonacci) would indicate the downtrend has ended and from this point, the odds would increase for a test of the 1357.47 peak.
A break below 1260.59 would bring a resumption of the downtrend that started from 1357.47 and confirm the bearish outlook on the 4-hour chart with scope to target 1251.49 and 1204.79.
