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Gold Trading at a Key Trendline Support at 1200

The price of gold in USD has been falling since making a high on the year in January at 1307. In February, it has falling to 1200 before stalling as we can see in the 4H chart.

Gold 4H Chart 2/20

(click to enlarge)

The 4H chart shows a market that is in a persistent downtrend. There are lower highs and lower lows. The moving averages are moving into bearish alignment and price has been holding under them. The RSI has tagged 30, and held below 60, showing maintenance of bearish momentum. 

After tagging 1200, price has consolidated this week, but is support at 1200 stronger than the others during this decline? A likely Yes.

The daily chart below shows that as gold flirts with 1200, it is also testing a rising trendline from November 2014's low around 1130. Despite the downtrend in February, the overall mode in the medium-term still looks bullish if price can hold above 1200, and the daily RSI can climb back above 40 after a brief violation. 

A break above 1225 would be a minimal requirement to say that price has bounced off the trendline. This would introduce the bullish continuation scenario, with the 1300-1307 highs back in sight.

A break below 1200 however puts the medium-mode in neutral and even bearish outlook due to the prevailing downtrend in 2014. Either way, there would be downside risk in the short-term towards the 1130-1150 lows.

Gold Daily Chart 2/20
(click to enlarge)