Gold (COMEX:GCQ14) appears to have found some noteworthy support at the 1241.0 level on the chart and may be in the process of forming a near-term bottom on the chart. Yesterday’s ECB decision to cut rates gave a much-needed boost to the metals and both silver and gold are seen trading higher. The next important level on the chart to monitor is at 1252.0, a previous S/R level from the end of May.
If price can hold above here, there may be a potential shift in momentum on the horizon in gold. More likely than not, this momentum reversal will be confirmed if and when price can trade above previous resistance around 1260.8. The RSI indicator has swung up to test 80 and has recently pulled back to the 40 level, both of which are characteristic of a market that wants to move higher. Until price can trade above 1260.8, the outlook for gold will continue to be sideways to lower, with any weakness below 1241.0 confirming negative sentiment.
Gold 30-minute Bar Chart (e-Signal)