In our last analysis we mentioned that bulls do not want to see price break below $1,780. Yesterday Gold price broke to new lows at $1,769 but the downward pressures were short lived. The RSI provided another bullish divergence and Gold price today is above $1,780 again.
Black lines - Fibonacci retracements
Gold price provided another bullish divergence. As long as this is the case we remain confident that a bigger reversal to the upside is imminent. Gold price broke the double bottom at $1,780 but the downward move is not strong enough as the RSI suggests. The bearish trend is weakening. The bullish divergence is only a warning and not a reversal signal. Price needs to break above $1,815 in order to confirm the reversal. However we still believe it is highly probable to see Gold price move towards $1,850-$1,900 as long as price is above $1,720. Next support is at $1,750 and the 78.6% Fibonacci retracement.
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