The recent history of the Gold's price action is getting interesting. The broken support was at first sight a minor one, but even though it had been broken with strength, the price which comes back did not prove to be of a corrective characteristic. This shows an impressive example of a very common fault in the trading arsenal. When a breakout happens, novice traders generally do not confirm this price action by evaluating the strength of the pullback. In this case, the pullback showed an outstanding performance, resulted in a battle between bulls and bears near the trendline
. At the end, bulls seemed to win, but a retest was imminent. The power fueling the retest was coming from a minor resistance (the red line), and it could not succeed. So this means the support is really a strong one. One which requires a strong resistance, this is why the price peaked at the level 1190.
Now there seems to be another revisit. We are yet to know the result. We do not even know the scope of this retest either. To learn it, we should check why the price went down after 1190, what was the importance of that level, and which resistance line fueled the downward action.
To be continued...