Gold has seen some choppy trading recently and overall the bias is to the downside as the market remains below the key 1300 level. Prices dropped sharply after an attempt to break above 1290 was not sustained.
The near-term picture is less positive as the flow is back to the downside and the RSI is below 50 in bearish territory on the 4-hour chart. The market is also below the 50 and 200-period moving averages.
Immediate support is expected at 1270 – an area that has been tested already. Failure to hold would see prices extend lower to target the October 27 low of 1263.43 and then the key 1260 area.
Gold prices would need to break above resistance at 1290 and rise above the key psychological level of 1300 to shift the focus back to the upside. The continued upside would target the September 7 peak of 1357.47, a level not seen since August 2016.
For now, the corrective sell-off from 1290 is still in effect and the intra-day price action is soft. Risk is clearly tilted to the downside. In the bigger picture, the market remains in a neutral phase as the consolidation continues.