Gold finished its 4-day rally. Gold fell from its overbought levels almost 1%. The US dollar became stronger after the new home sales data printed above expectations. The recent rally in gold was made by weak economic data posted recently. Continuing weak economic data from the major economies is indicating shifting funds towards safe heavens. SPDR gold trust holdings rose 0.26% to 803.7 tonnes.

Today traders eye Yellen's testimony, unemployment claims and Core durable goods orders. China imported 90 tonnes of gold net last month. China overtook India as the largest gold consuming nation. In the technical front gold stood at overbought levels. Yesterday in my report, I analysed Gold vs RSI. Exactly gold fell from that levels, $1,346.0 is a strong resistance level.

Technical analysis- In the Asia's trading session gold is trading at the level of $1,329.0. Our only concern is the overbought signals in the daily chart, otherwise gold is in a strong uptrend towards $1,361.0, if it trades above $1,346.0.

Downside-

· $1,321.0 - $1,318.0 is the major support zone.

· A day close below the level of $1,318.0 will push gold towards $1,307.0, $1,300.0, and $1,286.0.

· A daily closure below $1,245.0 will chage the trend.

· RSI favors the downside in the daily chart.

Upside-

· $1,335.0 and $1,346.0 are the strong resistance zones

· Sl at $1,318.0 is for longs

· RSI favours the upside in the hourly chart (pullback)

· A day close above the level of $1,336.0 will move gold towards $1345.0 and $1,361.0.

Recommendations-

• Longs with sl at $1,318.0, close above $1,336.0 then only hope for next up move. Until then, sell on rallies.
• On positional basis, until the price trades above the level of $1,346.0, we can't see higher levels.

$1,245 < $1,286 < $1,300 < $1,307 < $1,320-$1,318 > $1,336 > $1,346 > $1,361