On Monday, the price of gold managed to strengthen slightly and step away from 3-month lows hit on Friday, when strong labor market statistics were released in the US.
After the USD rally, an upward correction is expected. However, the price of gold has been declining for more than a week already that suggests a growing appeal of the US currency.
Support and resistance
Bollinger Bands indicator on the daily chart is still directed downward. The price range remains wide, but the price has been out of its borders for quite a long time. MACD keeps a sell signal. Stochastic is in the oversold zone and trying to turn up.
MAC recommends keeping existing short positions. According to Bollinger Bands and Stochastic, an upward correction is likely to form.
Support levels: 1085.22 (6 November low), 1080.70 (4 August low), 1077.20, 1073.00 (February 2010 low).
Resistance levels: 1095.53 (9 November high), 1101.05, 1105.50, 1110.00, 115.70, 1121.11.
Long positions can be opened after the breakout and consolidation above the level of 1098.00 (with appropriate indicators signals) with the target at 1110.00 and stop-loss at 1090.00.
Short positions can be opened after the breakdown of the level of 1085.50 with targets at 1070.20, 1070.00 and stop-loss at 1092.00.