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Gold Trading at the Crossroad

XAU/USD (Gold) showed some signs of topping last week. The 4H chart shows a double top formed at a falling resistance that's more clearly seen in the daily chart.

The market appears resilient against the double top attempt and is trading gold higher in the European-US session so far on Monday.

(Gold: 4H Chart)

The 4H RSI holding above 40 is a sign that the bullish momentum remains. 

If the 4H RSI dips below 30, and price can fall below 1320, we can shift our assessment to bearish. Otherwise, gold is at least neutral-bullish if not simply bullish.

The bullish outlook however is challenged by a falling resistance seen in the Daily chart. Even with a break, there is resistance seen in the 1355-1363 area.

Just above the 1365 level, there is another falling trendline that goes back to Oct. 2012. It will take a break of this resistance to truly show a breakout from the bearish mode gold's been in for almost 3 years now. In that bullish scenario, the first target should be the resistance around 1430-1435.

(Gold: Daily Chart)

Also note the extended bearish divergence with the RSI.

The bullish mode versus a resistance area sets up a potential for some sideways, whip-lash action this week.