Gold develops in descending channel in the near term.
Gold had found strong resistance at the 23.6% Fibonacci retracement level of the down leg from 1346.60 to 1266.29 around 1285 and is falling aggressively below the 20- and 40-simple moving averages (SMAs) in the 4-hour chart. The stochastic oscillator is heading towards the oversold territory while the RSI entered the negative zone and is still pointing down.
A move southward could initially find support near the 1266.29 – 1265 support zone before the price touches the lower boundary of the descending channel around the 1260 barrier.
On the other side, if the market pares some of the losses and returns higher, immediate resistance is coming from the 40- and then from the 20-SMAs at 1279 and 1280 respectively. More advances could send prices until the 23.6% Fibonacci of 1285 and the peak taken from April 26 at 1288.67.
In brief, the yellow metal has been developing within a downward range over the last month in the short-term, while in the medium-term the price remains negative as well.
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