Gold was down 0.6% to trade at around 1,700 USD, while silver fell 1.4% and was trying to defend the 15 USD support.
It looks like gold is testing previous highs and lows again, which is the first significant demand zone. This area is roughly 40 USD wide, which starts near 1,660 USD and ends near 1,700 USD. Large bids are expected to be placed in this area.
However, if this area is broken to the downside, the medium-term trend could switch to bearish, targeting 1,640 USD, or possibly the psychological level of 1,600 USD.
Alternatively, if gold defends this support zone, we could see another rally toward 1,725 USD or the current cycle highs at around 1,740 USD.
Gold is also testing a short-term bullish trend line, which could offer some help as well.
However, it looks like the bullish momentum is waning, which is evident from the recent push higher, which failed to break previous April highs. Thus, a more substantial correction could occur.
