Gold prices found support at the 23.6% Fibonacci level at 1243.02, which is the retracement of the upleg from 1047.57 to 1303.58 (December to May rise). Prices bounced up from this level, which could indicate that the decline from the 4-month peak of 1303.58 was a correction and the bullish market structure that was in place from 1047.57 could continue.
The bullish crossover of the 50-day moving average above the 200-day moving average in February was a bullish signal.
While the bigger technical picture shows a bullish trend, in the near term, there is risk for further downside momentum since the RSI has dipped below 50 into bearish territory.
As long as support holds at the 23.6% Fibonacci then the overall bullish market structure can be sustained for scope to target the 1303.58 high. Alternatively, prices could break the support at 1243.02 and fall towards the 38.2% Fibonacci at 1205.37 and then below this the key psychological level of 1200 comes into view. Further downside from 1200 would weaken the overall bullish outlook.
Forex trading and trading in other leveraged products involves a significant level of risk and is not suitable for all investors.
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