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Hugo in HTO Trading,

Gold: Potential bump and run pattern

Since the beginning of the year the commodity gained almost 11.0% but this past week was remained flat with a minor gain of 0.4% and continues in a warning phase since late September.

Last week the precious metal initially tried to rally but found enough selling pressure near the 10-week moving average to trim most of its gains, and closed in the middle of the weekly range, in addition the commodity managed to close within the previous week range, which suggests being clearly neutral, neither side is showing control.

The stochastic is showing a strong bearish momentum and is below the 50 mid line.

Gold continues to consolidate at 61.8 Fibonacci retracement level at 1,263.08 where it has found a strong support.

Expecting a downward move to a Fibonacci retracement level at 1,240.78 on a break below the support at 1,263.08 (scenario 1) however a bounce from the Fibonacci retracement level at 1,300.00 may trigger again some profit taking to the Fibonacci retracement at 1,263.08 (scenario 2).