Gold prices have rallied through $2,020 in the Europe session on Tuesday before slightly pulling back. The yellow metal is seen to be trading around the level of $2,012 at the moment of writing and is expected to turn lower anytime soon. Immediate price support is seen around the $1,960 mark and a break below this level will confirm that a meaningful high is already in place.
Gold has reached formidable resistance around the $2,020 mark, which is close to the Fibonacci 1.618 extension of the initial upswing between $1,753 and $1,853 respectively. Ideally, prices should reverse lower from here at least in a corrective way, if not a trend reversal. It is worth noting that a trend reversal remains highly possible.
Furthermore, it is also worth noting that the entire rally from $1,880 lows up to the high of $2,020 is accompanied by a strong bearish divergence on the RSI as shown here. Looking into the above covergences, gold remains vulnerable to a bearish reversal which may happen anytime soon. Watch out for a break below $1,962 to confirm this move.
Trading plan:Potential reversal against $2,075.
Good luck!