Gold is currently testing the lower limit of its medium term bullish channel at 1,774 suggesting a rebound. However a break of these levels will free a large potential and initiate a violent bearish channel.

Technical indicators provide sell signals but until the support is not broken the assumption of a rebound is most likely. Bollinger bands have greatly tightened in recent days showing a decline in volatility and the imminence of a violent movement. Furthermore the spot rate evolves on the levels of the inferior band supporting the hypothesis of a rebound.

The spot rate is currently testing the lower limit of its channel then we recommend 2 scenario: The first one is the hypothesis of a rebound then we recommend a buy on the level of 1,774 with the 1st objective at 1,785and then at 1,788. A break through 1,771 will invalidate this scenario. The second scenario is a break of its support then we recommend a “sell stop” that’s means to sell the spot rate as soon as it has broken through its support of 1,774 with the 1st objective at 1,764 and then at 1,760. A break through 1,777 will invalidate this scenario