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Gold (XAU/USD) approaches consolidation support

Gold (XAU/USD) has been bullish in 2016, but stalled after cracking 1370 in July. It has since been consolidating as we can see in the daily chart.

Gold Daily Chart 8/25

(click to enlarge)

Consolidation pattern:
- Gold appears to be consolidating in a triangle.
- As we enter the 8/25 US session, it is trading near this triangle's projected support. 

Key support at 1300; bearish scenario:
- The consolidation pattern does have a key support, but the more critical support will be 1300.
- So, even if the triangle support breaks, don't be so hasty in calling it a bearish market just yet.
- 1300 is a psychological level.
- It is also a previous resistance area.
- Most importantly a break below 1300 would break below a rising trendline and at least the 100- and 50-day simple moving averages (SMAs). 
- Meanwhile, if gold breaks below 1300, the RSI would likely fall below 40, which would reflect a loss of bullish momentum. 
- A break below 1300 opens up the 1200 handle, which is the lows from the previous consolidation period from February through May. 

Will the triangle support and/or the 1300 handle hold? Or will gold continue to consolidate with bullish bias. For now, if price bounces off 1300, we have upside first to about 1335 (middle of the triangle). If price can push through the triangle, we should anticipate a retest of the 1370 handle and an extension towards 1400.