A  gold price indicator is offering a bearish signal for the first time in nearly two months.

The MACD histogram, an indicator used to identify trend changes and gauge trend strength, has crossed below zero, confirming a bearish reversal. The indicator was last seen printing negative values on Nov. 28.

While the MACD has turned bearish, the candlestick arrangement on the daily chart is indicating the price pullback from six-year highs above $1,600 may be over.

The metal created a big hammer-like candle with a long lower shadow on Tuesday, a sign of seller exhaustion. More importantly, the metal rose by 0.64% on the following day, validating the seller exhaustion signaled by Tuesday's candle and confirming a bullish reversal.

Indicators tend to lag prices, therefore, traders can take the bearish reading on the MACD with a pinch of salt, especially since the price chart is flashing signs of bullish revival.

Gold could break above immediate resistance at $1,558 and challenge the lower high at $1,563. On the downside, key support is located at $1,536. At press time, the yellow metal is trading at $1,553 per Oz.



Source:fxstreet