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Gold - Watch for the Break of the 1190-1225 Range

Gold ended last week with a double bottom and started this week bouncing off of it. However, traders faded the rally as price approached a previous resistance pivot just under 1225.

Gold 4H Chart 3/4

(click to enlarge)

The 4H chart shows that price still remains under the falling trendline coming down from January's high around 1307. It also shows that price is still not able to clear above the 100-, and 50-period SMAs. Furthermore the RSI failed to clear 60, which means the prevailing bearish momentum is still in play.

Still, if price can hold above 1200, a rounded bottom can be developed.

The double bottom is old news at this point, and attention should be paid to the range between roughly 1190 and 1225. If price is able to climb back above 1225, it should clear the falling trendline as well, and if the RSI can tag 70, it would show bullish nascent momentum. Then, we have a more significant price bottom from which to anticipate at least a short-term bullish attempt.

The range is about 35, so above 1225, the breakout projection targets 1260. We do see a previous support area in between 1250 and 1260. Above 1260, gold will have the 1300-1310 highs in sight.

If instead, price falls below the 1190 support, it opens up first a support pivot around 1170, then the 1130-1140, 2014-lows.