GOLD: A new upward trend or correction ?

Over the past few mouths we saw a rise of the precious metal due to the prevailing uncertainty in markets, Brexit, the unsatisfying performance of the US economy and lack of motives of a short-term rise in interest rates and likelihood of a single rise in December.

Gold seems to have found support after the price collapsed on Tuesday. Right now the precious metal has reached levels of diagonal support and 200MA as it's shown on the chart below.

On a daily chart things are looking good for the precious metal but if we look at the bigger picture and  take a look on a bigger time frame things are not so well.

On FED's last meeting it became clear that the chances for a potential rates increase in December are higher than previous expectations and as we know strong dollar has a negative effect on gold. On the other hand BoJ has a problem with the devaluation of the yen which, like the precious metal, is also considered a save haven for investors.

Technically speaking after gold reached its peak in 2011 the gold bubble burst and the commodity lost more than $900 from its value until 2015. After the beginning of the correction in 2016, gold reached a horizontal resistance and 38,2 Fibo as we can see on the chart below.

And now where ?

If it breaks through 38,2 Fibo, gold will test levels around $1480 for ounce which is a 50% correction of the decline from 2011. However if the price remains below the diagonal resistance and The Federal Reserve takes new action for rising rates this year, the precious metal may reach to it's lowest point since 2015.

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