Gold has broken outside and above the sideways triangle and is testing short-term resistance at 1,329. The downward sloping resistance trendline is found at 1,330 and if broken, prices could push towards 1,350-60. Short-term support is found at 1,320 and 1,313. If these support levels are broken, then we should expect prices to move towards 1,300-1,290.
Short-term trend has changed to up as long as prices trade above 1,313. We think it more probably for the precious metal to find strong resistance at 1,330 and pull back down towards 1,300. Even if resistance is broken at 1,330, we will prefer to stay neutral as the bullish potential towards 1,350-60 is not risk rewarding.
The longer-term trend, as shown in the daily chart, remains down as prices trade below both the trendline and the Moving average. We expect prices not to be able to break above resistance and we will become strongly bearish if the support at 1,280-70 is broken with the target at 1,140-1,200.
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