Since the beginning of the year, the precious metal lost more than 2.5%, nonetheless this past week dropped almost 0.7% and is in distribution phase since mid-May.
Last week the commodity initially fell with a narrow range but found enough buying pressure to trim some of its losses and closed in the middle of the weekly range, in addition, managed to close below the previous week low, which suggests bearish momentum.
The stochastic is showing is showing an oversold market although is still displaying bearish momentum.
Gold broke to the downside the weekly support and breached the 61.8 Fibonacci retracement however found some buying pressure just below it to pull the price back up. Looks like there are some buyers around 1,261 up to 1,266 that might bring this downward trend to a halt.
Expecting an upward move to the 50 Fibonacci retracement at 1,285.36 on a bounce from a the 61.8 Fibonacci retracement at 1,266.33 (scenario 1) however a break below last week low at 1,261.21 may trigger another bearish run down to a key level at 1,242.79 (scenario 2).