On the back of broad based strength in Dollar, Gold’s decline continues today and breaks 1190 handle to as low as 1188.42 so far. The down trend from 1365.24 is on track for 1172.06 fibonacci level. Daily RSI may indicate Gold is in oversold condition again. But based on current acceleration, RSI indeed suggests solid downside momentum. 1172.06 could be taken out without much hesitation and the next real hurdle is probably 1122.81 support. And in any case, near term outlook will remain bearish as long as 1217.20 resistance holds.
In the bigger picture, currently decline from 1365.24 is viewed as part of the long term sideway pattern from 1046.54 (2015 low). Sustained break of 61.8% retracement of 1046.64 to 1375.15 at 1172.06 will pave the way to 1046.54/1122.81 support zone. At this point, we’re not expecting a break there to resume long term down trend yet. Hence, we’ll look for bottoming signal below 1122.81.
