Gold snapped its five-day winning streak with a 0.19 percent gain on Thursday, confirming a bullish divergence of the relative strength index on the 4-hour and hourly charts.
4-hour chart
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- As seen above, the RSI carved out a higher low yesterday as opposed to a new lower low on price and has found acceptance above 30.00.
- The bullish divergence indicates scope for a corrective bounce to $1,280-$1,285 resistance zone in the first half of the next week.
- The divergence, however, would fail if the price finds acceptance under the previous day’s low of $1,270.
- As of writing, the yellow metal is changing hands at $1,275 per Oz.
Trend: Corrective bounce
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