This is gold's third week of trading around the important long-term support of $1,170. The precious metal is, I believe, in a bottoming process and should strongly reverse to the upside once the decline is complete. The low could already be in -- unless we need one more final flush toward $1,120-40. Important resistance is at $1,200 and a break above it will confirm that at least the short-term trend has changed to bullish.
Exiting the bearish channel and breaking above the Ichimoku cloud in the 4-hour chart is what bulls need to start a reversal. Support is at $1,160. Long-term resistance, which has to break, is found at $1,330, where the long-term resistance trend line is found.
Bullish Signs
A break above the black trend line and entering inside the monthly cloud will be a very bullish sign. My target will be the upper Kumo boundary, currently at $1,524. I believe gold will reverse from current levels and soon start its next leg up. Everything is set up nicely for a reversal. Oscillators in 4-hour, daily and weekly time frames are either oversold and diverging or already turning higher from oversold levels.
We should soon know what will ultimately cause gold to explode higher.