Chinese home prices slowed down for the first time in 14 months in January. Data released yesterday revealed that home prices in major 70 Chinese cities rose 9.6% compared to 9.9% in the previous month. The gold price came attractively after the soft data, concerns over the housing market and growth in US and global economy. Gold rose to 4-month high and successfully crossed a crucial resistance zone, but was unable to consolidate above it.

Gold upward momentum still continued in the overbought zone. In the Asia's trading session gold is trading at the level $1336.0. In the daily chart, the RSI stood at 73, which was not favourable for longs. Gold completed its pullback towards 61.8 fib level. As we recommended in our previous post, gold looks bullish only above $1338.0. In yesterday's trading session, it just touched that level and came back. It was unable to consolidate above that level. Until it trades above $1,338.0, we remain in sell side. If it trades above $1,338.0, then it may touch $1,341.0, $1,346.0 $1,350.0 and $1,360. Supply zone $1,359.0-$1,361.0

Positional basis:

S1 $1,328.0 R1 $1,339.0

S2 $1,307.0 R1 $1,343.0

S3 $1,293.0 R1 $1,360.0

Intraday:

S1 $1,333.0 R1 $1,339.0

S2 $1,329.0 R1 $1,341.0

S3 $1,326.0 R1 $1,346.0

Recommendation:

Sell for target $1,332, $1,329 and $1,326, cmp $1,336.0

Buy above $1,339.0 then it may touch $1,341.0, $1,345.0