Gold currently trades around $1660. Recent price action has found strong resistance near the $1700 level.
We are bullish long-term for gold as long as it stays above $1550. But we can not trade using that level as a stop, unless you have bought in at 1560.
Nevertheless, we have to adjust our strategy to current price action. What has Gold done since $1800? It is declining, making lower lows and lower highs.
As shown below, we count this decline as corrective. The rise from 1550 to 1800 is seen as impulsive, therefore we are correcting now, during this move. A bottom has formed around the 61,8% retracement, but prices do not have clear impulsive moves upwards. Additionally resistance at 1700 has not been broken.
The bottom line is that in order for our bullish scenario to be back on track, prices must rise above the 1700 resistance where both the downward trend line is and the Ichimoku cloud stands. Until this is done, prices could continue their downtrend towards $1600. In the very short-term horizon (1 hour) support is found at $1652. Disclosure
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