Gold turned lower yesterday confirming our view that it is time for a correction towards 1,370. This is the first major support and we could see a pause of the decline at that price level. Gold has topped the mark of 1,430 and as we mentioned a pull back was imminent. Our first sell signal was given once and 1,412 was broken and the second level of 1,400 failed as support. Now, we are targeting the 38% retracement from 1,270 at 1,370.
The longer-term outlook is bearish for Gold. If the upward blue sloping trendline at 1,330 is broken, then we could expect 1,270 to be tested and see even lower prices. Currently, it is very possible that we are in a downward correction towards 1,350-70.
The 1-hour chart shows a breakdown in prices as support at 1,400 is broken. The short-term support is found at 1,390-1,380. The short-term resistance is found at 1,410-25. We believe that downward pressures will continue and push Gold prices below 1,370 eventually. We remain short with 1,430 as stop and the first target at 1,370.
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