Gold prices continued to show signs of stabilizing following the holiday weekend as prices made higher lows on the weekly chart. The longest losing streak in over a decade appears poised for a possible bounce as price continues to respect the $1,120 low.
Price action on the gold daily chart shows that in early December, both a bullish ABCD and Gartley pattern were tentatively invalidated after price broke down below the $1,140 level. If the bullish rebound continues, initial resistance may come from the $1,180 level. Major resistance may come from the psychological $1,200. If the bearish move returns, key support will come from the December 15th low of $1,124. A weekly close below that level could open the door to to make a run towards the 2015 low of $1,045.The trade: Buy Gold at $1,135 with a stop loss at $1,125 and a take profit at $1,165. The Risk/Reward Ratio is 1:3