Gold managed to break above resistance levels yesterday and reached our important resistance level of 1,320 but it did not manage to overcome it. This is the most important price area for determination of the immediate trend. We remain in the longer term bearish with short-term target at 1,255 and longer-term target at a new low below 1,180. Gold is trading near resistance levels and a break below the short-term support at 1,303 could open the way for an accelerated downward move to test 1,270 and 1,255.
The upward move from 1,270 remains corrective but also the bigger downward move from 1,349 is also a complex overlapping structure. This could put in danger our longer-term bearish target for a new low as we need to see an impulsive pattern lower in order to be more confident. In other words, if the decline from 1,349 is not impulsive, the chances of a new low below 1,180 will be small. Alhtough the price does not fall in a 5 wave pattern, the channel which still holds and the price continues to trade below the resistance levels and at the same time breaking support.
The daily longer-term downward sloping channel puts a lot of pressure on Gold and that is why we believe 1,260-55 is going to be tested. The decline may not have an impulsive form yet, but at least it clearly portrays that the trend is downward with lower lows and lower highs. We remain bearish biased expecting to see a break of the recent lows at 1,270. Today, we are bearish if the price breaks below 1,303 and will close all short positions if 1,326 is taken out.
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