Gold bounded off to the lower limit of its medium term bullish channel at 1,591 and is testing now the intermediate resistance of this one at 1,608 suggesting a decline. However a break of these levels would free a large potential and reach the upper limit of its channel at 1,633.
Technical indicators provide sell signals but until the resistance is not broken the assumption of a decline is most likely. Bollinger bands are much discarded as a result of a strong decline these days. Stabilization is expected in a short term.
The spot rate tests the intermediate resistance of its channel then we recommend 2 scenario: The first one is the hypothesis of a decline then we recommend a sell on the level of 1,608 with the 1st objective at 1,598 and then at 1,595. A break through 1,611 will invalidate this scenario. The second scenario is the hypothesis of a break of its resistance then we recommend a “buy stop”. We suggest to buy the spot rate as soon as it has broken through its resistance of 1,608 with the 1st objective at 1,618 and then at 1,625. A breakthrough 1,605 will invalidate this scenario.