Bullish AB=CD pattern hints a reversal in Spot Gold

Gold spot is witnessing double bottom at 1180 zones and nicely jumped after hitting 1182 during this decline. Bullish AB=CD pattern is also clearly visible on daily chart and has completed its CD leg at 1182 and now suggesting bullish resumption from point D which is exactly near prior bottom of 1180. Prices have climbed above 25 days SMA which stands at 1220 and now getting support near the same. 14 periods RSI is also showing bullish divergence and supporting reversal in this commodity. Immediate support is now placed at 1220 and stability above this level remains bullish whereas failure of 1220 with daily closing may trigger bearishness and then retest to recent lows around 1190 and more down side can’t be ruled out. Resistance seen near 1250 zones and sustained move above that level would bring 1270 on cards. Key resistance remains at 1272-75 zones and sustained move above 1272 would result in a rally towards 1300-1360 zones in coming days.

Recommendation: buying gold around 1233-1228 with stop loss below 1212 on daily closing for targeting 1270-1300 and more upside might be appropriate in short term.

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