Gold is currently testing the upper limit of its medium-term bullish channel at 1,756 suggesting a decline. However, a break of these levels will initiate a more violent bullish channel.
Technical indicators provide sell signals, but until the resistance is not broken the assumption of a decline is most likely. Bollinger bands have greatly tightened in recent days showing a decline in volatility and the imminence of a violent movement.
Gold is currently testing the upper limit of its channel, we suggest 2 scenarios. The first one is the hypothesis of a decline where we recommend a sell on the level of 1,756 with the 1st objective at 1,745 and then at 1,740. A breakthrough of 1,759 will invalidate this scenario. The second scenario is a break of its resistance where we advise a “buy stop” which means to buy gold as soon as it is broken through its resistance of 1,756 with the 1st objective at 1,766 and then at 1,770. A breakthrough of 1,753 will invalidate this scenario.