Gold – Flag pattern on daily chart, rising trend line intact

May 16, 2016

Resistance -$1284, $1288, $1295-1300

Support – $1263, $1253, $1243

• At 11277/OZ, the metal is trapped between flag resistance at 1284 and rising trend line support at $1263 levels.
  

• Failure to take out 1284 followed by a drop below Asian session low of $1272 would expose rising trend line support a $1263, under which losses could be extended to 1253 (23.6% of Sep 2011 high-Dec 2015 low).
  

• However, a rebound from weekly 5-MA of 1273 seen in Asia is more likely to end up breaching flag resistance at 1284, thereby making way for a rise to 1288-1295 levels.