Since the beginning of the year the price of gold has grown by almost 20%. Today gold went up from the level of 1063.00 to the highs of the month at the level of 1263.00 recorded 2 weeks ago. The price has reached $200 per ounce. However, on the weekly chart the price rebounded from the strong resistance levels of 1255.00 (ЕМА200) and 1235.00 (ЕМА144) and continue to decline.
On the weekly chart the indicators OsMA and Stochastic give signals for short positions. On the daily chart indicators recommend to open sell positions.
Break out of support level 1210.00 (ЕМА50 on 4-hour chart) will enable the pair XAU/USD to go to the lower limit of the downward channel on the 4-hour chart with the bottom limit near support level of 1160.00 (ЕМА200).
Consolidation below the level of 1140.00 (ЕМА200 on the daily chart) will bring the price back to the downtrend.
The scenario where the price breaks down resistance level of 1255.00 and goes up to 1300.00 (highs of 2015), 1385.00 (highs of 2014) and 1435.00 (highs of 2013) will allow the price to go to the uptrend, which had taken place till mid-2010.
However, this scenario is possible provided that financial markets will demonstrate instability, US Fed will reject further toughening of monetary policy, QE program in Eurozone will not be expanded and instability of the political situation will increase.
Support levels: 1210.00, 1170.00, 1160.00, 1140.00, 1061.00 and 1051.00.
Resistance levels: 1235.00, 1260.00 and 1300.00.
Sell Stop: 1185.00.
Targets: 1170.00, 1160.00, 1140.00, 1100.00 and 1060.00.
Buy Stop: 1240.00.
Targets: 1260.00, 1300.00, 1385.00 and 1400.00.