Gold technical analysis: Flat lined near $1,500, Tuesday's spinning top indicates bullish exhaustion

Gold is currently trading largely unchanged on the day at $1,500 and could drop to the 10-day moving average support at $1,484 during the day, as signs of bull market exhaustion have emerged on the daily chart.

To start with, the yellow metal created a spinning top candle on Tuesday, which occurs when the market sees a solid two-way business before ending the day with marginal gains or losses.

That candlestick represents indecision in the market place. However, in gold's case, it has appeared at six-year highs and so it represents buyer exhaustion.

Further, the 14-day relative strength index is reporting overbought conditions and the moving average convergence divergence histogram is producing lower highs above the zero line, a sign the bullish momentum is weakening.

All-in-all, the stage looks set for a corrective pullback. A short-term bearish reversal would be confirmed if prices close today below the spinning top's low of $1,481. On the other hand, a close above the spinning top's high of $1,535 would revive the bullish outlook.

Daily chart

Trend: Neutral-to-bearish

Pivot points