Gold price is stabilizing above $1,550 and this is positive for bulls. Price has retraced a bit more than 38% of the rise from $1,445 and there are many chances we see price revisiting $1,600 and higher. The form of the decline is corrective thus far while price has started a new upward move from $1,535.
Red rectangle- resistance area
Green rectangles- support signs
The long lower tail candlesticks imply that strong buyers support price for a move higher. Price is at resistance area of $1,560-63 as we have noted from previous posts. Recapturing this area will increase the chances of making a move to $1,600 or higher. Short-term support is at $1,548 and bulls do not want to see price below that level. This could lead to a new lower low towards $1,510.
Green lines – bullish channel
Gold price is inside the green bullish channel. It is important for bulls to stay above the lower channel boundary. As long as this is the case short-term trend will remain bullish. We are bullish as long as price is above $1,548 and specially if price breaks above $1,565. If support fails to hold we expect Gold price to make new lows towards $1,510 where the 61.8% Fibonacci retracement of the rise from $1,445 is found and the previous break out zone, once resistance, now support.