Gold Technical Analysis: Witnessing oversold bounce as expected

Gold is witnessing an oversold or corrective bounce in Asia, as expected, with prices currently trading at $1,278 per Oz. The 0.19 percent gain on the day could be extended further to $1,281-$1,285 resistance range, as the 1H relative strength index (RSI) is now reporting bullish conditions with an above-50 print. 

Further, the bullish divergence of the 4-hour chart RSI, confirmed last week, is now looking more pronounced with the indicator closing on 50 levels. 

Any gains to $1,281-$1,285 range, however, could be short-lived, as the last week's US retail sales and jobless claims have weakened prospects of a recession in the world's biggest economy, meaning the American dollar will likely remain bid in the next few days, capping gains in the yellow metal. 

Further, the longer duration charts are biased bearish, as discussed in the weekly gold report. 

4-hour chart

Trend: oversold bounce