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The yellow metal has been pulled back very strong amid concerns around the US recovery. Recently printed data poured cold water on the US economy recovery hopes. In the hourly and daily charts, overbought signs are indicating selling pressure on gold. In Asia's trading session, gold is trading at the level of $1,327. Last two days, we advised selling. We still think the same. In the daily chart RSI has stood at 75.0, which is an overbought position. But here the question arises, how deep this falling can be?
Intraday- The support exists at the level of $1,320.0. If the metal breaks the level of $1320.0, it can fall to $1,316 and $1,310. If the RSI stays at overbought levels of 75.0 in the hourly chart, the price would fall around $20-$35.
On a positional basis, after a break below $1,264, we can see the trend change. On the upper side, a break above the level of $1,338 would add $30 to the price. In September 2012, RSI reached the overbought level at 81 and the price corrected almost $100. Now RSI reached 75, let's see how much it corrects.
Intra recommendation-
Support: $1,320, $1,316, $1,310.
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