Gold rebounded on the six-month low of 1261 on Thursday and drove the price until the 38.2% Fibonacci retracement level of the upleg from 1122 to 1365, around 1273. Currently, the precious metal is trading above the 20-simple moving average (SMA) in the 4-hour chart, increasing the chances for upside movement. Technical indicator in the short-term are suggesting further advances.
The Relative Strength Index (RSI) is sloping upwards below the threshold of 50, while the MACD oscillator is rising in the negative territory and above its red-trigger line.
Should prices reverse higher, immediate resistance could come at 1273, which is the 38.2% Fibonacci level. Above that, would take the price closer to the 40-SMA, which could act as major obstacle near 1276.55 at the time of writing. A successful surpass of this zone would open the way towards the 1284 barrier.
To the downside, there is immediate support at the six-month low of 1261, while below that, the next support to watch is the 1250 hurdle, which holds below the descending channel.
In the bigger picture, the yellow metal has been developing within a downward sloping channel since April 11, indicating that the price remains in bearish mode in the long term.
