Scenario A: If gold bulls succeed in an upside breakout above the Aug. 24 high and the 200-day moving average –it would open the door for a strong rally wave. The next key upside chart objective lies at the $1,206-$1,207 per ounce region, the early and mid-June highs for gold.
Scenario B: If the $1,170 resistance ceiling holds firm, gold will be vulnerable to a short-term period of "backing and filling" in the wake of the recent strength. Initial support lies at $1,135.90 with strong swing low support at $1,103.80.
Bottom line: Gold has rallied to a significant technical juncture. Action around the $1,170 zone will be an important clue about near term direction for the yellow metal and if the recent rally has enough legs to continue.