Gold: Short-term relief after holding the $1700 support

Gold has been moving lower in recent sessions as the risk-on environment gathers momentum but has been able to hold the $1700 and now a near-term relief is expected, in the opinion of FXStreet’s analyst Rajan Dhall.

Key quotes

“Gold has bounced off the $1700 level which matches up quite nicely with the 23.6% Fibonacci zone. The good news does not stop there as the Relative Strength Index (RSI) indicator also moved into an oversold area.” 

“The price waves have made a few wave lows now but in comparison to some of the prior ones, the RSI does not warrant being in oversold territory. This is called a bullish failure swing and is considered a positive sign. This does not always indicate that the trend will move back higher but it might offer a short term reprieve.”

“The next resistance is the wave low from the first lower high lower low pattern at $1739.04. If this level is breached to the upside then the uptrend might be back on. If it is rejected then the price could move to lower levels and a decent support level is the 38.2% Fibonacci zone.”