Applying Elliot wave theory, a possible interpretation of the current price action could see a tactical pushback fullfilling the corrective wave C down up to the 0.618 fibonacci retracement target, which would also be a confluence level of a certain importance. Then, the rally could continue, especially on the wake of the "brexit" hysteria, or some other looming threats of recession.
However, if the economic data continues to show a possible slow but steady recovery, gold could see a more significant pullback to levels around 1245.50 which would be a full 1.618 retracement of the breakout point and confluence of the 200 day MA. Once there it could continue to range depending on the risk aversion level and brexit outlook. The impications of a close call vote complicate the forcast as risk aversion could ensue regardless of the actual outcome of the vote.
A negative divergence is also forming with the RSI which would support a short term retracement.
However, if the economic data continues to show a possible slow but steady recovery, gold could see a more significant pullback to levels around 1245.50 which would be a full 1.618 retracement of the breakout point and confluence of the 200 day MA. Once there it could continue to range depending on the risk aversion level and brexit outlook. The impications of a close call vote complicate the forcast as risk aversion could ensue regardless of the actual outcome of the vote.
A negative divergence is also forming with the RSI which would support a short term retracement.