Technical analysis of gold for December 8, 2016

Gold prices showed some strength yesterday as price managed to move out and above the short-term bearish channel. However, important resistance as shown by the Ichimoku cloud has still not been breached and therefore there is no trend reversal confirmation yet. On the other hand Silver prices have confirmed short-term trend reversal and this could be an indication that Gold will do too.

Blue lines - bearish channel

Gold price is testing cloud resistance on the 4-hour chart. Short-term resistance is at $1,190-$1,200. If Gold manages to break above it, then bulls will be in control of the short-term trend and we should expect at least a short-term bounce if not a full-scale trend reversal. Support is found at $1,160. If broken, we should expect Gold price to move towards $1,120.

The weekly candle has moved back inside the weekly Ichimoku cloud and this is a promising sign combined with buying interest when prices reach $1,170-60. That is why the last two weekly candles have long lower tails. It is important however to see a weekly move above last week's high at $1,198 in order to confirm the short-term reversal and the importance of the 61.8% Fibonacci retracement. I remain bullish Gold.The material has been provided by InstaForex Company - www.instaforex.com