Gold has fallen sharply in the last couple of weeks and is close to major support. As of Thursday, gold was trading around $1221 and as seen on the charts, is proving some upside momentum from the last two days.
The downside rally in gold filled a gap on the charts, which was created in the first week of January. At the same time, that area also represents a 261.8%% Fibonacci retracement. A long-term support trendline is staying close to the $1196 mark on oversold indicators. The current candlestick-pattern formation suggests a possible bounce or a corrective rally. Not sure if a bottom exists yet or not. On the fundamental side, U.S. action on global issues and weak economic data might support price in the coming session.
Based on the above, it's possible for gold to move upward toward a possible target of around $1240, then $1258.
MCX levels -> S2: (26290); S1 (26445); cmp (26620); R1 (26870); R2 (27280)
Note - Above technical analysis is not a buy/sell recommendation.
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