Gold: Remains stuck under the $1702 resistance level [Video]

Gold

The drift lower on gold continues as the run of lower daily highs is now into its fourth session today. The market remains stuck under the resistance of the previous breakout of $1702 and for now the near term corrective outlook continues. Yesterday, we began to consider the prospect that the correction had already played out. The hourly chart shows a small top pattern implying $1666/$1671 as a target area, and this has now been achieved. The hourly chart shows an intraday breach of the pivot support at $1671 but also what is now a continued failure of the hourly RSI around 60. Although the market quickly regained $1671, this configuration suggests that risk remains to the downside for now. The hourly MACD lines failing around neutral play into this too. So we keep our powder dry in regards to buying into this weakness. This is a market that needs confirmation that the corrective move is done. Hourly RSI consistently above 60, hourly MACD consistently above neutral, and most importantly a decisive breach of $1702 resistance is required. This would break the run of lower highs and change the near term trend. The bulls will be encouraged if $1671 can again be held today into the close. If not, then the next downside target for the correction would be $1640.