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GOLD recently traded higher, but failed to clear a major barrier around the $1200 level. It is currently correcting lower and looks set for more losses in the near term. There was a major release during the Asian session, as the Chinese GDP was published. The outcome was as expected with a rise of 7% in the first quarter of 2015. This helped GOLD buyers to gain some ground, but it is still facing several resistances on the way up. Today, in the US, the Industrial Production measuring the volume of production of US industries such as factories and manufacturing will be released by the Board of Governors of the Federal Reserve. Let us see how it can impact GOLD price.
There is a confluence of two bearish trend line formed on the hourly chart of GOLD, which stalled the upside earlier and currently acting as a hurdle. It would be very important to see if buyers can manage to clear the highlighted trend lines or not. One more critical thing to note is that the 100 hourly simple moving average is above the same trend lines, which means there is a solid resistance forming around the $1195-$1200 levels. A break above the same might set GOLD for a move towards the 200 hour SMA. Alternatively, a failure to break higher could ignite a down-move in the short term.
If GOLD moves lower from the current levels, then initial support is around the $1188 level, followed by $1184.
Overall, one might consider selling rallies in GOLD as long as it is below both the bearish trend lines on 4H chart.