Off 3.5-month lows, but bias remains bearish

Gold is currently trading at $1,277 per Oz, having a low of $1,273 yesterday – a level last seen on Dec. 27.

The bounce from 3.5-month lows may be extended further to $1,281 (April 4 low), as the 4-hour chart relative strength index (RSI) is reporting oversold conditions with a below-30 reading at press time.

The recovery, however, will likely be transient, as the yellow metal confirmed a descending triangle breakdown with a close at $1,276 yesterday. The breakdown has reinforced the bearish view put forward by the lower highs pattern and the downward sloping 10-day moving average.

As a result, gold appears on track to test support at $1,262 (trendline connecting August and November lows).

Daily chart

Trend: Bearish


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