Gold price has broken above short-term resistance and can push even towards $1,220 but the wedge pattern we observe is tightening and if price breaks back below $1,200 we could see another test of the recent lows.
Gold price is forming a bearish wedge. The short-term trend remains bullish as prices continue to make higher highs and higher lows, while we have broken short-term resistance at $1,200-$1,205. If price manages to hold above $1,200 (lower wedge trend line and Ichimoku cloud) we could see a run towards $1,220. If $1,200 is broken, we should expect a sharp move towards $1,190 at least.
However, the bigger picture also has another potential scenario as the rise from recent lows at $1,130 is far from impulsive. The most probable scenario I see is the formation of another sideways large triangle. This is what I believe is the most probable path for gold price.
The material has been provided by InstaForex Company - www.instaforex.com
