Gold Price Forecast: Prepping for a corrective rally?

• Wednesday's doji candle signals bearish exhaustion. 
• Bull doji reversal would mean a short-term bearish-to-bullish trend change and could yield rally to $1,240-$1,250.

Gold sellers have likely run dry and hence a minor corrective rally could be in the offing, technical charts indicate. Currently, the yellow metal is changing hands at $1,233/Oz, having clocked a 2018 low of $1,220 yesterday.

Daily chart

The yellow metal created a doji candle on Wednesday, signaling indecision predominantly among the sellers following a 10 percent depreciation in three months.

Interestingly, the doji candle has been created along the falling channel support at a time when the relative strength index and stochastic are reporting oversold conditions.

However, only a close today above $1,229 (previous day's doji candle high) would confirm a short-term bullish trend reversal.

On the other hand, a close below previous day's low of $1,220 would signal a continuation of the sell-off, although the downside scope if limited, given the indicators are signaling the sell-off is overdone.

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A bull doji reversal would indicate a short-term bearish-to-bullish trend change and would allow a re-test $1,240 (former support-turned-resistance). A weekly close above $1,235 (50-month MA) would further validate the bull doji reversal. The primary trend will remain bearish as long as the 5-week and 10-week MA are trending south.