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Gold (XAU/USD) Technical Analysis - 3 Reasons to Buy, 1 Reason Not to

the price of gold made a high on the year just under 1375 back in July. Since then, we had a descending triangle followed by a breakout, which was then followed by a pullback, which respected the broken triangle as a price top. Then price slid sharply, making its way down to 1171 today (11/25 session).

XAU/USD Daily Chart 11/25

(click to enlarge)

Reasons to buy:
1) Price has retreated to the 61.8% fibonacci retracement level.
2) The RSI is showing oversold condition.
3) Today's bullish candle (11/25) could end up being a bullish engulfing candle, or at least an outside bar. Today's price action could potentially set a support pivot at 1171. 

Reason not to:
The prevailing trend in the short to medium-term is neutral to bearish, and all the signs noted above are very early signs.

What else to look for:
We might want to wait for another test of 1171, or get a couple more days where price closes above 1180 to gain confidence that price is anchoring above the 1170-1180 area .

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