Gold is now testing previous swing highs near the 1,675 USD and this is the first major support for short-term trading. If the price declines below this level, we could see further correction toward 1,640 USD, or possibly toward the 1,600 USD threshold. Volatility remains elevated, thus larger movements can still occur pretty quickly.
The precious metal still hasn't reached overbought conditions on the daily chart, according to the RSI indicator, but smaller time-frames were overbought, which probably led to some profit-taking.
Alternatively, if gold starts to rally again, the first intraday resistance could be at the psychological level of 1,700 USD, with another level to watch at the current cycle highs near 1,750 USD.
The greenback refuses to decline, despite massive inflationary stimulus, which might be holding gold lower for now. However, the long-term trend in precious metals seems bullish.
