Consolidation on gold

Gold has entered into a consolidation phase as shown on the daily chart of the precious metal. The price of gold consolidates between the 1211 level as support and the 1236 level as resistance. Inside the consolidation, gold has formed what it appears to be a bearish flag or pennant. It is called a bearish flag, because the trend coming into the consolidation is bearish. Therefore, there is a higher probability of seeing a breakdown to the 1200 level, which could act as support. But the price may also break to the upside and form a pullback or correction. Above the 1236 level, the 55 day EMA may act as a resistance, but a better resistance could be the 1273 level, due to the fact that at that level we can find its 200 week exponential moving average.