The gold price reached the long-term resistance target projection level of $1,360 before consolidating and retreating. The retreat offers a buying opportunity for an uptrend continuation back to $1,360 and higher. There are four technical features that suggest a bullish rebound.
The first feature is the strength of the underlying uptrend. This is shown with the Guppy Multiple Moving Average (GMMA) indicator. The long-term group of averages is consistently well separated. When prices dipped in June 2016, the long-term group did not develop any compression. This shows good investor support.
The current price dip has also not caused any compression in the long-term group of averages. This shows there is strong investor support for the trend. Investors are buyers when there is any price weakness.
The second feature is the recent minor support and resistance level near $1,290. This is not a strong resistance feature. It is important because it is also near to the upper level of the long-term GMMA. This provides two support features for any retreat in the gold price. This strong support provides a good base for a rally rebound and uptrend continuation.
The third feature is the behavior of the short-term group of averages. They are developing some compression but this is a slow retreat. The compression is not sharp and rapid so this suggests simple trading activity rather than signaling a change in the underlying trend. The compression behavior is similar to the temporary retreats in April and June.