Gold is currently testing the intermediate resistance of its medium-term bearish channel at 1,667 and seems to initiate a decline. However, a break of these levels will free a large potential to reach the upper limit of its channel at 1,679.
Technical indicators provide buy signals but, until the resistance is not broken, the assumption of a decline is most likely. Bollinger bands have greatly tightened in recent days showing a decline in volatility and the imminence of a violent movement.
Gold is currently testing the intermediate resistance of its channel, so we recommend 2 scenarios: the first one is the hypothesis of a decline, then we recommend a sell on the level of 1,667 with the 1st objective at 1,657 and then at 1,655. A break through 1,670 will invalidate this scenario. The second scenario is a break of its resistance, then we recommend a “buy stop”, which means to buy gold as soon as it has broken through its resistance of 1,667 with the 1st objective at 1,677 and then at 1,679. A break through 1,664 will invalidate this scenario.