Gold is trading lower following the strong pullback on the 1366 resistance level on January 25. Having a look at the short-term timeframe the price almost hit the 38.2% Fibonacci retracement near 1316 level of the last up-leg with the low of 1236 and the high of 1366. The bearish correction is confirmed by the near-term technical indicators.
In the 4-hour chart, the RSI indicator is sloping to the downside below the 50 level, while the stochastic oscillator posted a bearish crossover within its moving averages, signaling further downside bias.
Currently, the price is extending the bearish tendency. If the precious metal drops below the 38.2% Fibonacci mark, it could hit the 1308 support level. Falling below this area could see prices re-test the 50.0% Fibonacci level, which holds near the 1300 significant psychological level.
Conversely, upside moves are likely to find resistance at 1327, which coincides with the 40-simple moving average in the 4-hour chart at the time of writing.
