Technical analysis of Gold for May 9, 2016

Gold has pushed towards $1,300 as we expected in our latest analysis, and the price is pulling back lower towards the $1,270 support. This is a critical level for bulls as a break below $1,270 will cancel any bullish chances for a move above $1,300.

Gold is at the 61.8% Fibonacci retracement of the rise from $1,270 to the recent high at $1,295. The $1,280-75 area is an important short-term support, and any bounce should come from this area. If a bounce does not come, the rejection at $1,300 will become even more important and, combined with a break below $1,270, will open the way for a push lower towards $1,200.

Blue lines - bullish channel

Gold is trading above the Kumo and is making higher highs and higher lows. Oscillators are diverging and are turning lower from overbought levels. Despite the bad NFP numbers announced on Friday, support on the dollar has not helped gold prices rally and make a convincing break above $1,300. Daily support is at $1,270-60. A daily close below those levels will push the price towards the lower channel boundary at $1,240 with increased chances of breaking it.