One week already gold is evolving in the range of 1604-1620. It is currently testing the intermediate support of its short term trading range at 1,610 suggesting a rebound to the upper limit of its trading range to 1620. However, a break through these levels will release good potential and enable to reach the lower limit of its range to 1604.
Technical indicators do not provide clears signals but until the support is not broken, the hypothesis of a rebound is most likely. Bollinger bands have greatly tightened in recent days showing a decline in volatility and the imminence of a violent movement. Moreover, the superior band strengthens the upper limit of the range at 1,620 and the inferior band strengthens the intermediate support of the range at 1,610 supporting the assumption of a rebound in a short term.
According to previous events, the market will provide a bullish opportunity at the level of 1,610 with the 1st objective at 1,620 and then at 1,625. A breakthrough 1,604 will alter this scenario.