Technical analysis of Gold for May 10, 2016

Gold price fell sharply yesterday below $1,270 and reached the lower short-term support boundary at $1,260. A short-term bounce towards $1,270 is justified now or even towards $1,280. So taking profits from short positions is justified in order to re-sell higher.

I believe the short-term downward move is complete and a bounce should bring Gold price towards at least the 38% Fibonacci retracement. Gold price could bounce even towards $1,280 and under the Ichimoku cloud. Short-term trend is bearish as long as price is below $1,295. Breaking above it will open the way for $1,400.

Blue lines - bullish channel

Gold remains above the Daily Kumo and inside the bullish channel. Support is important here at $1,260. Gold bulls will need to hold above this level and try and break above $1,285 which will increase the chances of a new higher high near $1,325. However the current pull back suggests that if we see a new high, it can push prices even towards $1,400.

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