Gold made a strong upward move towards $1,255 yesterday, but it also performed a strong pullback to erase most of its gains. However, the pullback did not technically hurt the bullish scenario. A trend remains bullish after the breakout, and we still expect new highs towards $1,300.

Green lines - short-term support

Yellow line - stop for bulls

The price is above the Ichimoku cloud and the short-term support is seen at $1,220. The price is bouncing higher to what can be the next wave up towards $1,270. As long as gold price is above yesterday's low, bulls have nothing to fear. If however support fails, then we should expect heavy selling to push the price towards $1,170 at least.

The weekly chart remains bullish as support at $1,200 is held and buyers keep pushing prices higher when we reach around $1,200-$1,220. Gold price should hit at least one more new high. The level of $1,300 is expected to be reached, but bulls need to be very cautious as oscillators on a weekly chart are entering overbought levels. We have no bearish divergence yet but any breakout below $1,220-$1,200 should find us with long positions.