Gold posted a fresh 17-month low of 1204.36 last Friday, but now it is trading slightly higher from this bottom. The aggressive sell-off continues after the bounce off the short-term falling trend line and the 20- and 40-simple moving averages in the 4-hour chart.
From a technical point of view, the RSI is currently increasing negative momentum and is heading to the downside, while the %K line of the stochastic oscillator completed a bearish crossover with the %D line.
Should prices decline further, immediate support could be found around last week’s 17-month low (1204.36). In case of steeper losses, the precious metal could meet support around 1180.00, the lowest level reached since January 2017.
However, if the market manages to pick up speed, the 1220.00 hurdle could offer nearby resistance ahead of the 23.6% Fibonacci retracement level of the downleg from 1309.00 to 1204.36, around the 1228.75 key level. A significant close above the latter could drive the price until 1235.00, identified by the high on July 26.
In the medium-term, the outlook remains negative since prices hold below the moving average lines and the descending trend line.
