Technical outlook for gold; RBC

Quotes from RBC Capital Markets:

-We began to turn more positive on gold on January 15 in response to prices piercing a resistance trendline that dated back to October 2012 at 1239.

-While the resulting spike higher was encouraging, we note that prices failed to sustain moves above resistance at 1297 as the daily studies moved to overbought levels.

-This has prompted a pullback, with prices testing key uptrend support at 1200 as the daily studies move to oversold levels.

-We are watching this level closely as a daily close below 1200 would end the current corrective phase (and nullify our bullish view) via a bearish trend reversal.

-This outcome would favour a move to secondary support at 1167, followed by a double bottom at 1137 as bearish sentiment increases once again.

-While initial resistance is located at 1221 and 1234, we stress that a close above the trendline at 1253 (flush with the 200-day moving average) will be required in order to add to bullish price momentum and extend the correction.

-Secondary resistance is located at 1297 and 1308, followed by 1324.