Is This A Corrective Drop Before Gold Rallies Again?

Gold rallied to $1357.45, which is the highest local high the metal has reached for the past year, and then began to retrace – for the past two weeks it has dropped with almost $30, at the moment being at $1324 – $1325.

That pullback is normal, considering the fact that it reached the strong resistance visible on the monthly time frame at $1360, which stopped its rally.

On the W1 time frame, however, Gold returned in the upward trend channel and continued developing within it, which is why I view this drop as corrective. It is possible Gold will reach the support trend line, after which it will start climbing again to the resistance trend line at $1390 – $1400.