- Risk-off mode supports the Japanese yen and gold prices
- Gold price stays above $1265 boding well for further increases
- $1281 changes itself into a crucial support zone
Declines across the European stock markets have deepened which could herald a larger pullback around the corner. In this environment risk-off currencies along with gold prices are in demand. At the same time, a correlation between gold prices and the US 10Y bond has decoupled. From a technical standpoint one needs to notice that gold prices have broken local resistances which could open space for further gains. What’s more once the ongoing pullback seen in stock markets persists, it could even push precious metal into the bull market anew.
A weekly time frame suggests that the bull market hasn’t been doomed to failure as the price is defending its pivotal support line at $1265. The first target for buyers may be at $1305 whereas once they are able to break it to the upside, it could open space for the 2016’s highs around $1370.
A lower interval illustrates that gold prices have tested a broken resistance at around $1281 which ought to act as the closest defense point for bulls. Having said that, the chart above seems to suggest that space for further rises is quite abundant, hence $1305 might be another aim to tick for buyers.
Based on the overbalance methodology we can set a reach for possible corrective moves which could emerge in the nearest future. As it’s been depicted at the chart below the largest pullback has been $18.7 while smaller ones have been $11.2 and $7.3 respectively. Thus, once that kind of a pullback occurs close to an important support zone, it could increase odds that the underlying upward move will continue.