Gold (27.05.2015) traded lower and reached to $1172. However, the low was followed by quite a recovery, but failed to cross the $1244 level.
Now, gold is trading around $1187 mark, and as we can see on the chart, after reaching to $1232 area, the rally stopped and it took only two powerful trading sessions to bring it back below $1200 mark. These two sessions, dated 19.5.2015 and 26.05.2015, were associated with high volume too. Meanwhile, the sideways move in gold from the last four weeks is probably coming to an end now with a downside breakout once again. We need to observe $1171 area carefully, which may open a new downside leg for the coming trading session. At the same time, RSI started traveling below 50 mark, which suggests that bears are still in personal assistant.
On the fundamental side, in the last few weeks, some negative economic data were unable to provide a boost to gold prices, while rising dollar prices keeps the pressure on prices.
Based on above studies, we prefer to stay on sell for possible levels around $1272, followed by recent low at $1241.
MCX levels -> S2(26340) S1(26720) cmp(26880) R1(27040) R2(27250)
Disclaimer: Above technical analysis is not a buy/ sell recommendation.