Gold is currently testing the intermediate support of its medium-term bearish channel at 1,585 suggesting a rebound. However, a break of this level will free a large potential and reach the lower limit of its channel at 1,523.
Technical indicators provide sell signals, but until the support is not broken the assumption of a rebound 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 support of its channel, we suggest 2 scenarios. The first one is the hypothesis of a rebound where we recommend a buy on the level of 1,585 with the 1st objective at 1,595 and then at 1,598. A breakthrough of 1,582 will invalidate this scenario. The second scenario is a break of its support where we advise a “sell stop” which means to sell gold as soon as it is broken through its support of 1,585 with the 1st objective at 1,575 and then at 1,572. A breakthrough of 1,588 will invalidate this scenario.