Gold price is showing some bullish signs. It is trying to break above the short-term bearish channel and if this breakout happens, we should expect gold price to move above $1,190 closer to $1,200 to reach a new higher high in October.
Gold price has bounced off the 38% Fibonacci retracement and is testing a short-term channel and cloud resistance at $1,170-75. A break above this resistance area will be a bullish sign as this will imply that the correction is over and chances to hit a new high is very strong in October. Support is found at $1,160 and this should be used as stop for long positions.
Weekly gold price formation shows how gold price remains below the Ichimoku cloud, thus longer-term trend remains bearish, but the formation could have already ended and gold could be preparing for an important breakout, which could signal that a long-term low is in. As the level of $1,200 is important resistance, I would expect a deeper pullback from that area. Whether it is a new low or not it does not matter as the downward potential for gold price is limited. Gold is most probably preparing for a long-term reversal and we should be patient. The weekly chart will definitely show it to us.
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