The yellow metal finally encountered the resistance of the 55-hour SMA just below the 1,230 mark. This resistance level managed to force the bullion into a short term retreat. However, the retreat was unlikely to last. After a review of the metal’s chart, it was discovered that the bullion is in a medium term descending channel pattern. The rebound, which occurred on Monday, was not only caused by the monthly S1 at 1,220.50, but also by the lower trend-line of the channel down pattern. Thus, it can be assumed that the bullion’s price will head for the upper trend line of the channel. In accordance with this hypothesis, not only the 55-hour SMA should be broken. The 100-hour SMA near the 1,235 mark would also be passed.
