Technical analysis of gold for January 24, 2017

Gold price has made a double top at $1,220. Despite the continued Dollar weakness Gold has not managed to break to new highs. There are several bearish short-term indications and I continue to expect a pullback towards $1,160-$1,180.

Blue line - bearish divergence

Arrows - double top

Short-term resistance is at $1,220. If broken, we should push towards $1,235. Support is at $1,210 and at $1,197. If broken, we go towards $1,180 first and then towards $1,160. Short-term trend remains bullish as long as price is above the Ichimoku cloud. But the RSI is diverging for some time now and the stochastic turning lower from overbought levels provide a warning for bulls.

Gold price has stopped its rise at $1,220 as we expected from $1,120. A pullback is justified. I prefer to see price move towards $1,160 and the 61.8% Fibonacci retracement of the entire rise and then reverse upwards towards $1,300.The material has been provided by InstaForex Company - www.instaforex.com